The Kauai Island Utility Cooperative plans to break ground this spring on a 12-megawatt solar energy project in Anahola now that it has secured a lease for the site.

The KIUC’s board of directors and members of the Hawaiian Homes Commission this week approved the terms of a 25-year lease of 60 acres for the $54 million project, according to a news release from KIUC.

The Anahola project, which ie expected to be in operation by early 2015, will generate electricity at a cost of about 12.5 cents a kilowatt hour compared to the 24 cents a kilowatt hour for electricity created by burning oil, according to KIUC.

The system is expected to produce about 5 percent of the island’s annual energy needs, or enough electricity to serve about 4,000 households. During daylight hours about 20 percent of Kauai’s electricity will come from the project, according to KIUC.