American solar photovoltaic panel manufacturer, First Solar, has signed a memorandum of understanding with China to partner on a 2,000-megawatt power plant in Ordos City, Inner Mongolia. This follows an agreement signed last month for Canadian Solar to develop a 500-megawatt solar power plant in Baotou, Inner Mongolia.

Before these announcements, the largest solar electricity projects were a 550 megawatt plant to be built by First Solar in California and a 500 megawatt solar thermal plant being developed for the US Army in the Mojave Desert.

In addition to the planned solar power plants, wind farms with a total capacity of about 6,000 megawatts are planned for Inner Mongolia.

The surge in Chinese power plant investment has come as a result of China’s $586 billion economic stimulus package which included an estimated $70 billion for improving the country’s electricity grid.