Kauai Island Utility Cooperative said it plans to develop a 10-megawatt photovoltaic project that would be the largest solar power facility in the state.

The KIUC is seeking approval from the U.S. Department of Agriculture’s Rural Utilities Service to pay for the PV and battery storage project with a $68 million federal loan that was previously earmarked for construction of an oil-fired, 10-megawatt combustion turbine generator.

To qualify for state and federal tax incentives the nonprofit KIUC has formed a new for-profit subsidiary to develop the project. The for-profit unit is necessary because KIUC as a tax-exempt cooperative does not qualify for the state or federal state incentives.

A majority of KIUC’s generation today still comes from fossil fuels, but the utility has recently expanded its portfolio of renewable technologies. KIUC now has 17 megawatts of solar and biomass-fired generation projects under power purchase agreements.  KIUC also is considering the installation of about 35 megawatts of hydroelectric power.