A section of Bembridge High Street has been closed this morning (Tuesday) due to the dramatic incident, which unfolded at around 09:30.
Locals have described seeing sparks flying and smoke billowing from the electrical components attached to the pole.
2 fire appliances from Ryde and Shanklin are on scene and have cordoned off the area surrounding the burnt-out pole.
A power line has also come down across the carriageway, posing a risk.
Nearby properties have been evacuated as a precautionary measure whilst the fire service await the arrival of Scottish and Southern Electricity Networks to isolate the power.
It is unknown how long the electricity supply will be switched off in the area.
UPDATE @ 10:52 – Engineers from SSEN are now on scene and are working to isolate the power.
A generator has also been brought to the scene to assist in getting homes and businesses back onto mains power.
The area remains cordoned off and fire crews are still on scene.
VIDEO: Watch as the electricity pole catches fire, sparks and arcs which resulted in loud bangs heard across the village of Bembridge.
The power cable narrowly missed a vehicle driving past at the time of the incident.
Thanks to Matt Morris, Joe Hunt & Olivia Pike for the video clips