The facility is operated by Hokkaido Electric Power Co. The battery will be able to store 60 megawatt-hours of electricity.
Officials said 20 billion yen ($204 million) in taxpayer money will be sunk into the project.
The storage battery will allow Hokkaido Electric to procure 10 percent more electricity through natural energy sources.
Under a feed-in tariff system implemented last July, electric power companies are obliged to purchase electricity generated by natural energy sources. That led to an increase in the construction of solar power generation facilities.