By Pacific Business News (Honolulu)

SunPower Corp. has won approval from the Hawaii Public Utilities Commission to sell energy to Hawaiian Electric Co. from a 5-megawatt solar farm planned for West Oahu.

The project is the first utility-scale solar farm on Oahu to win approval from state regulators.

SunPower (Nasdaq: SPRWA, SPWRB) will design, build and operate the solar farm on 40 acres in Kalaeloa leased from the state Department of Hawaiian Home Lands. The San Jose, Calif.-based company plans to start construction on the photovoltaic farm this year, once permits are issued, and expects construction to take five months.

Under the 20-year power purchase agreement, SunPower will sell electricity generated by the solar farm to Hawaiian Electric C0. (NYSE: HE) starting at less than 20 cents per kilowatt hour, the company said in a statement. The price will then rise at a fixed rate before a price reduction during the second half of the contract, HECO said.

The SunPower agreement, first announced in March, was a result of HECOâ¿¿s 2008 request for proposals for renewable-energy projects on Oahu.

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