It is a quiet town in northern Victoria with a population of fewer than 5,000 people, but Numurkah packs a powerful punch.

Key points: Melbourne's tram network is set to be powered by the state's largest solar farm

Melbourne's tram network is set to be powered by the state's largest solar farm The solar facility sits on 500 hectares of land once used for grazing cattle

The solar facility sits on 500 hectares of land once used for grazing cattle More than 300,000 panels will put 255,000 megawatt hours of electricity into the national power grid annually

The town, just north of Shepparton, has on its doorstep a massive solar farm that will soon generate enough electricity to power Melbourne's entire tram network.

The 128-megawatt Numurkah Solar Farm took less than a year to build at a cost of $198 million.

It will utilise more than 300,000 panels spread across 500 hectares once used for grazing cattle and sheep to supply 100 per cent renewable energy to offset the tram network.

The carbon emission reduction generated by the farm is the equivalent of taking 75,000 cars off the road or planting 390,000 trees, according to the Victorian Government.

An aerial view of the solar farm at Numurkah in northern Victoria. ( Supplied: Neoen )

The facility, which will generate approximately 255,000 megawatt hours of electricity into the national grid each year, received funding for development under the Victorian Government's Solar Trams initiative — part of the state's plan to reduce carbon emissions.

Victorian Minister for Energy Lily D'Ambrosio said the project was the largest in the state.

"The solar farm will play an important role in supporting the transformation of our energy system towards clean, renewable energy and reaching our renewable energy target," Ms D'Ambrosio said.

Farm built in record time

The farm will also help power the Laverton steelworks, after a 15-year deal was struck by French renewable energy producer Neoen — the company that developed the solar farm — with energy company SIMEC ZEN.

Neoen Australia managing director Louis de Sambucy said the farm had a lifespan of up to 30 years.

"It's a great achievement and has been done in record time — with the community we want to make the best use of the wind and solar resources," Mr Sambucy said.

"This [solar farm] is extremely efficient and is already providing above expectations, so it's in the top range in terms of size and efficiency."

Solar planning guidelines under scrutiny

Terry Court, from the Goulburn Valley Environment Group, said the Numurkah solar farm was a step forward, but the Victorian Government needed to invest further in renewables to meet its targets.

The Government has committed to renewable energy targets of 25 per cent by 2020, and 40 per cent by 2025.

Mr Court said he wanted to see a goal of 100 percent renewable energy by 2040.

The launch of the Numurkah project comes amid fresh calls for the Victorian Government to decide the fate of three outstanding solar farm applications in the district.

Neoen Australia managing director Louis de Sambucy and Victorian Environment Minister Lily D'Ambrosio. ( ABC Goulburn Murray: Rhiannon Tuffield )

Independent member for Shepparton Suzanna Sheed was concerned because the three proposed farms — at Lemnos, Tallygaroopna and Tatura East — were located on prime irrigation land.

"We don't want these farms to go ahead on this land, and really encourage solar farms to be located close to the grid but not on land that could be used to food production," Ms Sheed told the ABC.

If approved, Ms Sheed said there would be less viable land in the region for food production.

"They're capable of being watered, developed, used for food and if we end up with solar farms, it's really taking them out of commission for 20 to 30 years," Ms Sheed said.

The solar farm in Numurkah on a cloudy day. ( ABC Goulburn Murray: Rhiannon Tuffield )

"The proposals are currently under consideration, but Victorian Minister for Planning Richard Wynne said he would not make a decision until solid guidelines were established.

Ms Sheed said the release of the guidelines had passed its deadline of June 30.

"There are important planning issues at stake here and all relevant government departments have now had an opportunity to have their input," she said.

"I hope the Government will be prepared to make the decision to reject the three outstanding applications and not be influenced by threats of legal action from multinational companies that could easily locate their solar developments in other, more suitable areas."

Ms D'Ambrosio said the process was continuing.

"I think it's important that we get it right, the guidelines that are under consideration will be the guidelines that will be in place for a number of years, and provide the necessary roadmaps for industry to understand where it can invest and the local conditions it needs to take into account," she said.