Hoku Corp., a Honolulu clean-energy technology company, said its net loss widened sharply in the quarter ending June 30 as the company continued to run up expenses at its polysilicon plant under construction in Idaho.

Hoku lost $10.2 million, or 19 cents a share, in the quarter compared with a loss of $2.7 million, or 5 cents a share, in the same period a year earlier, the company reported.

Earnings also were weighed down by a decline in revenue, which the company generates primarily from the installation of photovoltaic electricity systems through its Hoku Solar subsidiary. Revenue dropped to $485,000 in the latest quarter from $930,000 a year earlier.

Hoku is on track to deliver the first commercial shipment of polysilicon from its Pocatello, Idaho, plant by year’s end, said CEO Scott Paul. Polysilicon is the main material used in the production of solar panels and microchips.

Paul said the company’s single-biggest expense last quarter was the $5.3 million it paid Idaho Power as part of an agreement to buy electricity from the utility for the plant.

The electric service agreement, signed in 2008 and amended in 2009, provides for certain minimum payments to Idaho Power each month regardless of whether the company is consuming any power. Hoku said the minimum payments were agreed to by both sides to guarantee that Idaho Power could service Hoku’s large power demand.

Once Hoku begins producing polysilicon, the electricity expense will be included in its cost of goods sold. But prior to startup it is being booked as an operating expense, Paul said.

"To ensure that we can commence operations this year, we have elected to make these payments. However, we are continuing our discussions with Idaho Power in an effort to mitigate these near-term losses," he said.

The plant will start out with a production capacity of 2,500 metric tons of polysilicon annually. A planned second phase will boost capacity to 4,000 metric tons a year, Paul said. Worldwide polysilicon capacity was approximately 190,000 metric tons in 2010, a 90 percent increase in annual production from the year before, according to Renewable Energy World magazine.

Because of delays in construction of the plant, Hoku has had to restructure contracts with polysilicon customers. Paul cited an example where Hoku recently amended an agreement with a company called Solargiga that extends the delivery until the first quarter of 2012. Hoku agreed to concessions on price and on the terms of the repayment of their deposits, he said.