Texas-based Xtreme Power, a portfolio company of SAIL Venture Partners, has signed a contract with Hawaii-based Kauai Island Utility Cooperative (KIUC) to sell a 1.5MW utility-scale battery storage system.

KIUC will install Xtreme Power’s Dynamic Power Resource (DPR) at the Koloa substation, and the storage system will help mitigate the effects of a 3MW solar photovoltaic (PV) project, which will also feed into Koloa.

Xtreme Power said that the battery storage system will allow KIUC to smoothen the power output from PV projects by providing real and reactive power, compensating for sudden output fluctuations in a matter of microseconds.

This rapid response will enable KIUC to better control the installation’s ramp rates and maintain a predictable flow of power from the solar farm to the electrical grid, the company said.

The company said that the project is planned for completion in the third quarter of 2011.