Hawaiian Electic Co. has signed an agreement to buy electricity from planned solar project in Waianae that will provide enough energy to supply the needs of about 40 homes.

Nevada-based Blue Earth Inc. has formed a local subsidiary called Waianae PV-2 that will develop and own the 497-kilowatt project on Kuwale Road. Construction on the $2 million ground-mounted project is expected to begin in the third quarter of 2012 and be completed by the first quarter of 2013. The project is the first for Blue Earth in Hawaii.

HECO will buy electricity from Waianae PV-2 for 18.9 cents a kilowatt hour under a 20-year contract. The project is being developed under HECO’s “feed-in tariff” program, an initiative launched in 2010 to streamline the regulatory process for independent power producers that want to sell electricity to the utility.