Officials at Castle Medical Center said they expect to cut their electricity bill by nearly $200,000 a year after upgrading cooling and lighting systems in the largest project ever undertaken under the state’s main energy efficiency program.

Castle received about $650,000 in rebates from Hawaii Energy, which uses funds from Hawaiian Electric Co. ratepayers and the federal government to encourage energy efficiency.

The rebates reduced the cost of the project to about $2 million from $2.6 million, according to Hawaii Energy. At current electric rates Castle will save $190,530 a year, enough to recover costs in about 10 years, according to Hawaii Energy.

"Without the incentive funding Castle Medical Center would not have been able to complete this project as soon as we did," said Kathryn Raethel, president and chief executive officer of the hospital.

The new cooling and lighting systems were designed and installed by Honolulu-based Energy Industries. The company replaced Castle’s old chillers and cooling towers with new models that are 40 percent to 50 percent more efficient, said Duane Ashimine, executive vice president and chief technology officer of Energy Industries.

The state-of-the-art compressors used in the cooling system feature magnetic drive technology that eliminates the need for ball bearings and lubrication. Such "frictionless" systems can operate much more efficiently than traditional models, Ashimine said.

The lighting system overhaul included more efficient bulbs and sensors to turn off lights automatically in areas that aren’t in use, he said.

"Upgrading the lighting provided great savings. It will pay for itself in less than two years," Ashimine said.

Gov. Neil Abercrombie and the three members of the Public Utilities Commission attended a ceremony Tuesday during which medical center officials were presented with a check for $647,637.

"Partners like Castle Medical Center are key to helping our state reach the goal of 70 percent clean energy by 2030," Abercrombie said.

The bulk of the project’s cost, $527,069, was paid for with federal stimulus money. The balance of $120,568 came from the Public Benefits Fund, which is generated from a charge on HECO bills. Residential customers pay about six-tenths of a cent per kilowatt-hour into the fund, while commercial customer pay about three-tenths of a cent per kilowatt-hour.