A $150 million solar farm is set to be built near the New South Wales town of Bungendore east of Canberra.

The solar panels will cover 100 hectares and produce enough energy to power 10,000 homes.

Member for Monaro Steve Whan says it will be the state's largest solar farm.

"There's 32 blocks of solar panels arranged around 2 to 3 metres above the ground, so it's a very big development," he said.

"It is something that will bring quite a few jobs to the area as it's built, about five jobs in an ongoing way. But more importantly, a real contribution to renewable energy generation in this region."

The project is being built alongside the Capital Wind Farm.

"The main benefit of bringing them together is essentially the electricity infrastructure that puts them into the grid, so that just makes it easier for them to link into the grid," he said.

"But it does give them two sources of power there - obviously both solar and wind are dependent on the weather conditions and the environmental conditions around it. So it does give them a more consistent supply into the network."

Mr Whan says he does not expect there will be any opposition to the project.

"While wind farms are sometimes controversial, solar farms seem to have very broad support, and particularly in this region.

"So I think this will have a very high level of community support and the approval from the Planning Department will be very welcome."

Tony Mohr from the Australian Conservation Foundation welcomes the project but says it has been a long time coming.

"It is a good start but it really is just scratching the surface of a tremendous energy resource in New South Wales," he said.

"Enough power to power 10,000 homes is a good contribution. But of course we have many more homes than that and many more industries that need a lot of electricity. We've made a good start here but there's a lot more to go."