The electric utility on Kauai today announced plans to develop a 12-megawatt solar energy project that will generate about 6 percent of the island’s daily electricity needs.

The Kauai Island Utility Cooperative will build the $40 million project on 67 acres it is leasing from Grove Farm Co. near Koloa, KIUC officials said in a news release.

The project is the third utility-scale solar facility under construction or in development on Kauai. When completed the three projects will have a generating capacity of 30 megawatts and be able to meet about 50 percent of Kauai’s daytime electrical demand, according to KIUC.

KIUC has hired California-based SolarCity to build the system. Assuming county and state regulatory approvals are received KIUC expects to begin construction by July 2013 and complete the project by the end of 2014.

“This is a huge step toward achieving our goal of using renewable resources to generate at least half of our power needs by 2023,” said Teofilo Tacbian, chairman of KIUC’s board of directors.

He said the solar energy generated by the project will replace about 1.7 million gallons of oil KIUC imports each year for electrical generation.