The NSW city of Goulburn is building a community-funded 1.2-megawatt solar farm.

Local residents, tired of waiting for action from state or federal governments, are planning a project that will include 4000 panels to provide capacity to power up to 500 houses in the region.

The Community Energy 4 Goulburn group was formed at a sustainable energy forum with the NSW Office of Environment and Heritage three years ago, group president Ed Suttle said.

“[The office] must have said they had funding available right then to finance a feasibility study for a community solar farm,” Mr Suttle has told the Sydney Morning Herlad.

“The land owner had land available and it was right next to the right sort of power cables to make the thing potentially work.

“Within about three weeks they had put in a grant application and had the money for a feasibility study and off they went.”

Mr Suttle said the group wants the farm to be as community-focused as possible.

“In a perfect world the farm will be built by the community, owned by the community, and supplying power to the community and the profits stay within the community,” he said.

The seven-person Community Energy 4 Goulburn committee wants $2 million to finance the project, and says it has received 800 expressions of interest from potential investors already.

“We've made a commitment that we will be 51 per cent community owned as a minimum and I'm confident that we'll get that 51 per cent,” Mr Suttle said.

The group plans to provide 50 per cent of its energy output to one major end user, such as a local government or large institution, leaving the other 50 per cent available to the Goulburn community.

It has recently secured a number of local and state government permissions to move ahead.

“Where we're at now is we can build and we can put the power into the local poles and wires,” Mr Suttle said.

“The farm will be completed in 2018.”