SunEdison will build the nation’s largest solar-electric farm for Duke Energy Corp., which will buy all of the power from the project, according to an announcement this week.

Under the 20-year agreements, the electric-power company’s customers will receive more than 16 megawatts of energy from the farm in North Carolina starting no later than Dec. 31, 2010.

The project will consist of 36 individual solar facilities at a single site, with construction expected to start in the third quarter of next year.

The deal stemmed from a request for proposals that Duke issued in April of last year, according to the announcement Wednesday.

“We said we wanted to lead the way in the development of more renewable energy and we meant it,” said Keith Trent, group executive.

Duke has run into controversy with plans to build a nuclear power plantand for its extensive use of coal – but also has been an advocate of greenhouse emissions caps.

Travis Bradford, president of the Prometheus Institute, a Greentech Media partner, called the news “quite a milestone.”

“It’s not only a large plant – the largest in the U.S. – but it’s in a new place,” he said. “North Carolina is not known to be a solar state. But it's in line with the trend that we’ve seen. A lot of utilities are trying to figure out how to address this stuff at the utility scale, and my guess is in a not-too-distant future, someone will be offering a bigger one.”

The deal also is a milestone for SunEdison, which installs and finances projects by charging nothing up front, instead selling the renewable-energy credits from the ownership of the projects to large corporations and requiring customers to sign deals to buy the electricity generated.

Because the federal investment-tax credit doesn’t allow utilities to take advantage of those credits, financing models such as SunEdison’s help to make it possible for utilities to get renewable energy without having to front all the costs, Bradford said.

One of the bills Congress considered that would have extended the credits last year would have dropped that restriction, but it didn’t pass, he said.

And even if that restriction were dropped, utilities might still prefer to stick with power-purchase agreements such as this one, he said.

“It’s not clear to me that utilities have the right tax appetite to be able to do these projects themselves, or the experience with the technology, so an offering with SunEdison’s, which brings the installation and project-management expertise with the technology, the monitoring of the system going forward and the financing all wrapped up together is probably a pretty attractive offering for a utility.”

Other companies, such as MMA Renewable Ventures and Recurrent Energy, are offering similar models.

In December, MMA Renewable Ventures financed the largest photovoltaic system in North America today, a 14-megawatt project at Nellis Air Force Base built by SunPower Corp.

Before that, the largest U.S. photovoltaic system was an 8.22-megawatt plant in Colorado, which SunEdison financed and built for utility Xcel Energy.

While a new “largest U.S. system” crops up every few months, these systems still aren’t the world’s largest PV plants -- and are nowhere near the size of the solar-thermal plants in the works, Bradford said.

The world’s largest system, which also charges frequently, is held by a 23-megawatt park in Spain today, according to Greenpeace Energy. The largest planned solar-thermal project is a 500-megawatt project, expected to expand to 900 megawatts of capacity, from BrightSource Energy and the Pacific Gas & Electric Co., according to EcoWorldly.

One potential risk to the Duke project is the future of the U.S. investment-tax credit, which is set to expire at the end of the year. Congress has tried to renew it several times, but has failed so far, and one installer, Akeena Solar, last week said it expects the credit will not be renewed on time for the industry to avoid financial pain.

Because power-purchase agreement business models rely so heavily on tax credits, AltaTerra partner Jon Guice said in March that the companies could be more heavily impacted than the rest of the industry if the incentives aren’t renewed (see Power-Purchase Agreements Could Lose Market Share).

“It’s definitely a risk,” Bradford said. But he added that the deal seems to have built in enough time to deal with the issue if the credits fall through.