When up and running in summer 2011, the plant will fully power the 1,800m sq East Cowes Waitrose store, which opens next week.
Waitrose East Cowes branch manager, Richard Tudor Thomas, said: "The store looks amazing, and now that we have permission for the energy centre, I look forward to East Cowes being the most sustainable supermarket store in the UK."
Excess energy created will power new developments adjacent to the store.
All 225 Waitrose stores source their electricity from green energy through an agreement with EDF Energy, but the company is looking increasingly at on-site renewables.
The food outlet is the first Waitrose on the Isle of Wight and is part of a £250 million scheme to regenerate the town.