Hawaiian Electric Co. is proposing to build the state’s largest solar photovoltaic energy project next to its Kahe Generating Station that would deliver power to the grid at a cost nearly 40 percent below what the utility pays to generate electricity by burning oil.

The 15-megawatt project would be the first PV facility owned and operated by HECO. The utility has selected SolarCity to build the project, which is subject to approval by the state Public Utilities Commission.

HECO officials estimate the facility would save ratepayers $64 million in reduced fuel costs over the 30-year estimated life of the project. The Kahe Generating Station burns primarly low-sulfur fuel oil to generate electricity.

The solar facility would be able to produce electricity at a cost equivalent to a power purchase agreement with a price of 14.5 cents a kilowatt hour, according to HECO. That compares favorably with the 22.7 cents a kilowatt hour it costs to produce electricity from oil, according to HECO.

“This is a unique opportunity that  benefits our customers because it allows us to quickly develop more low-cost clean energy,” said Ron Cox, HECO’s vice president of power supply.

If successful, the Kahe solar project would be larger than a 12-megawatt PV facility being built by the Kauai Island Utility Cooperative in Koloa. That project, also being built by SolarCity, was billed as the state’s largest solar farm when it was announced.