Construction of Photon Energy's near-600 hectare plant would begin in 2019 and have the largest power output in NSW.

The plant will be built near Gunning, an hour's drive north of Canberra.

Australian managing director Michael Gartner said the plant would be brought online in 30 megawatt blocks over the 12-month construction period, with each block estimated to be able to power 15,000 homes.

Once fully operational, Mr Gartner said the plant will be able feed enough power for 150,000 homes into the national energy grid, indirectly powering homes in the ACT.

"One of the big issues at the moment is that the energy supply is falling behind demand," Mr Gartner said.

"This has led to increased wholesale electricity prices which are being transferred over to the consumers. Increasing the supply, that should help ease the rise on power prices."

"It's going to be a significant contribution to the energy transformation that's occurring in Australia to renewable energy."

Mr Gartner said initial construction will create hundreds of jobs, including trade jobs, with a crew of 20 - 30 required to run the plant once operational.

Acting energy minister Mick Gentleman said the plant would not directly power Canberra homes.

However it would contribute to the national renewable energy target, which is counted towards the ACT's own 100 per cent by 2020 target.

"The ACT Government welcomes a proposal for potentially Australia's largest solar farm to be built less than an hour's drive from Canberra," Mr Gentleman said.

Mr Gentleman said the national energy market was in desperate need of new power generation capacity.

"Due to federal policy uncertainty, there has been a prolonged investment freeze in the electricity market, causing greater dependence on more expensive gas generation, and driving up electricity prices as a result," he said.