The state’s largest solar project was formally dedicated Thursday during a ceremony in Koloa.

The 45,360 panels will generate 5.5 percent of the electricity annually used on Kauai, or enough to power about 4,000 homes.

The 12-megawatt array owned by the Kaua’i Island Utility Cooperative generates electricity at a cost of about 11 cents per kilowatt-hour compared with about 23 cents for electricity created by burning oil.

KIUC, which serves 33,000 customers, said the project will help the utility meet its goal of reducing the average residential bill by at least 10 percent over the next 10 years.

The Koloa solar array became operational in July and went into full commercial operation earlier this month. The $40 million project was built by SolarCity on 67 acres leased from Grove Farm near the old Koloa Mill.

U.S. Rep. Tulsi Gabbard and Kauai Mayor Bernard Carvalho Jr. joined members of the KIUC board of directors and staff in the dedication ceremony.

KIUC’s daytime solar penetration is now the highest in Hawaii and is currently one of the highest in the U.S., according to information from other utilities obtained by KIUC.

In just four years, KIUC has significantly increased the amount of renewable energy on its grid as it moves toward its goal of using renewable resources to generate 50 percent of Kauai’s electricity by 2023. By the end of this year, renewable resources will generate 30 percent of Kauai’s electricity, up from 8 percent in 2010.

"Bringing the Koloa project online is a huge step toward our goal of generating most of our electricity by using cheaper, cleaner renewable resources," said David Bissell, president and chief executive officer of KIUC.

It will reduce KIUC’s consumption of oil by 1.7 million gallons a year and reduce KIUC’s carbon dioxide emissions by 18,000 tons per year.