WASHINGTON: US energy giant First Solar on Tuesday won a deal to build the world's largest solar power plant in China, aimed at helping mitigate climate change concerns.

First Solar will construct the two-gigawatt plant in Ordos City, Inner Mongolia, under a memorandum of understanding (MOU) inked Tuesday with Chinese officials at the company's headquarters in Tempe, Arizona.

The solar facility is to be built in four phases over a decade and supply power to three million Chinese homes, the company said in a statement.

The financial terms of the deal were not disclosed.

"We're proud to be announcing this precedent-setting project today," First Solar chief executive Mike Ahearn said in the statement.

The United States and China, he said, could work together to reduce the cost of solar electricity to "grid parity" -- where it is competitive with traditional energy sources -- and "create the blueprint for accelerated mass-scale deployment of solar power worldwide to mitigate climate change."

China's chief legislator, Wu Bangguo, who is the second-most powerful leader in the ruling Communist Party after President Hu Jintao, witnessed the signing of the MOU.

Wu is expected to meet with US congressional leaders and officials in President Barack Obama's administration in Washington on a variety of energy, trade and business initiatives.

The MOU outlined a long-term "strategic partnership" between First Solar and Ordos City, where First Solar would also consider a manufacturing investment, officials said.

"We are very pleased to be partnering with one of the solar industry's global technology leaders in a project of such significance to Ordos's low carbon future," said Cao Zhichen, vice mayor of Ordos municipal government.

"Discussions with First Solar about building a factory in China demonstrate to investors in China that they can confidently invest in the most advanced technologies available," Cao said.

China is keen to expand capabilities to produce affordable solar electricity as part of a goal to provide 10 percent of its energy from renewable resources by 2010 and 15 percent by 2020, including from wind, hydro, biomass and solar. Various state incentives are also being introduced to support such growth.

While current Chinese solar installations total about 90 megawatts, Beijing has boosted its previous solar capacity goal of 1.8 gigawatts by 2020 to two gigawatts by 2011, and 10-20 gigawatts by 2020, according to a statement issued in conjunction with the MOU signing.

The first phase of the Ordos solar power plant will be a 30-megawatt "demonstration" project that will see construction begin by June 1, 2010, officials said.

The second and third phases will be 100-megawatt and 870-megawatt projects, expected to be completed by the end of 2014, while the fourth phase will be a 1,000-megawatt facility tipped to be completed by end 2019.

Based on the MOU, during the implementation of the initial phases of the project, First Solar "will actively review the possibility of module and supplier manufacturing sites in Ordos, and other considerations required to support a First Solar investment."

First Solar also intends to facilitate expansion of the supply chains in China for thin-film photovoltaic module production and for the recycling of photovoltaic modules after use.

A photovoltaic module is a packaged interconnected assembly of solar cells known more commonly as a solar panel. It is used as a component in a larger system that provides electricity for commercial and residential uses.