The Navy held a lease-signing ceremony Thursday with Hawaiian Electric Co. for a 20-megawatt alternating-current solar farm at Pearl Harbor’s West Loch Annex that HECO said would be the second largest for photovoltaics in the state.

HECO plans to build, own and operate the solar facility, which could begin generating electricity in 2018. In exchange for approximately 100 acres needed for the project, Joint Base Pearl Harbor-Hickam will receive in-kind consideration in the form of electrical infrastructure upgrades to Navy- owned facilities, HECO said.

The ceremonial signing held at the Hickam Officers’ Club was attended by, among others, Assistant Secretary of the Navy for Energy, Installations and Environment Dennis McGinn; Gov. David Ige; and Alan Oshima, HECO’s president and CEO.

“From a Navy perspective, we are doing it certainly for an improved environment,” McGinn said. “But even more fundamentally and aligned with our mission of national security, we need to diversify our energy sources ashore and afloat.”

Luis Salaveria, director of the state Department of Business, Economic Development and Tourism, said Hawaii spends roughly $5 billion a year importing oil for energy needs and has some of the highest electricity prices in the nation.

“You are truly protecting our way of life,” Salaveria said of the Navy. “And together we are definitely committed to reaching our shared clean-energy goals with renewable resources and the ingenuity and innovation that our country is known for.”

The Pentagon is requiring 3 gigawatts of renewable energy to power military facilities by 2025 — enough juice for more than 2 million homes.

The renewable energy generated by the West Loch solar facility will feed into the island’s electrical grid and serve all customers on Oahu, including those on the joint base, HECO said. The project requires the approval of the Hawaii Public Utilities Commission.

“We are building momentum on our journey toward 100 percent renewable energy. We’ll get there by working closely with the Navy and our other partners in the community to develop smart, sustainable projects,” Oshima said.

A 2015 draft environmental assessment for the West Loch project said the Navy planned to lease 380 acres to HECO for a first phase on 169 acres producing 20 megawatts, and a second phase on 211 acres generating an additional 30 megawatts. The Navy said second phase would have required “substantial upgrades to (HECO’s) transmission infrastructure,” and that part was dropped.

Farmland is to the north of the site, Navy munitions storage is to the east, and to the south and west are homes. A separate photovoltaic ground site nearing completion on the Navy’s Waipio Peninsula is expected to generate about 12 megawatts of power, officials said.

Hawaiian Electric Co. used renewables to generate more than 23 percent of its electricity in 2015 on island grids, the electricity provider said. HECO said the 27.6-megawatt Waianae Solar project, being developed by Eurus Energy and expected to be operational late this year, will be the largest solar farm in Hawaii.

HECO noted other renewable energy projects including:

>> The 24-megawatt Na Pua Makani wind farm in Kahuku.

>> The new 50-megawatt biofuel-capable Schofield Generation Station.

>> Ongoing approvals of rooftop PV systems, with more than 77,000 systems approved.

>> The 8-megawatt Honolulu Airport Emergency Power Facility.

>> Two 2.87-megawatt solar farms on Maui.