Entergy New Orleans celebrated the start of construction Tuesday on the city’s first large-scale effort to produce solar power.

The 1-megawatt pilot project, at Entergy’s former A.B. Paterson facility near Chef Menteur Highway, is expected to be in service by midyear. Its more than 4,000 solar panels will generate enough electricity to power 160 average homes, officials said.

The project is a first step in determining whether solar energy can power homes and businesses in New Orleans on a large, sustainable scale.

Many New Orleans homeowners, aided by federal and state tax credits, already have purchased solar panels that turn the sun’s energy into electricity. They have seen reduced electricity bills as a result.

However, those panels struggle to provide power for the homes on cloudy days, at night or during peak energy-usage times, said Charles Rice, Entergy’s CEO and president.

The pilot project will use a 500-kilowatt one-hour advanced lithium battery to help the new solar panels harvest more energy, even on days when the sky is overcast, Rice said. The electricity generated will then benefit all Entergy customers, not just those with panels on their roofs.

The project will not necessarily spark substantial bill decreases, officials said. Instead, any added power generated will offset the amount of power Entergy must purchase.

After the solar project is constructed, Entergy will track sun availability, battery performance, operating and maintenance costs and electric power transmission over an undetermined length of time to determine whether a grander solar endeavor is possible, said Gary Huntley, Entergy’s vice president of regulatory affairs.

It’s not clear how much solar power Entergy — which now uses a mix of natural gas, nuclear power and a small amount of coal to produce electricity — is looking to use over the long haul.

“We don’t have a necessary target, but what we do want to know is: How do we integrate this into our grid?” Huntley said.

Once collected, that data would help inform not only Entergy but other utilities as well, he added.

There is at least one snag in plans to create a large-scale local solar effort. An estimated seven to 14 acres per megawatt is usually needed for these projects, Huntley said. It’s hard to find enough space in New Orleans to hold the thousands of panels that would be needed to replace non-renewable energy sources on a significant scale.

“We will have to go back to the drawing board on that one,” he said.

Blattner Energy, a Minnesota-based firm, will begin construction of the pilot project in about two weeks.

Officials did not provide a cost estimate for the project Tuesday but said a final number would be available as the work moves closer to completion.

That cost won’t be immediately reflected in customers’ bills, Huntley said. Costs would instead be combined with Entergy’s pool of investments, which the utility would recover from ratepayers at a later date.

Every three years, Entergy files a plan with the New Orleans City Council that outlines how the company will meet customers’ future power needs. The pilot solar project was included in a recent version of that plan, officials said. Council members in 2014 called on Entergy to consider and plan for utility-scale renewable technologies.

Follow Jessica Williams on Twitter, @jwilliamsNOLA.