The second phase of Australia's largest solar project is nearly complete, with the launch today of the Kings Canyon solar power station in central Australia.

The testing of the station is already underway.

The $2.9 million project should provide up to a third of the peak power requirements of the tourist resort at Kings Canyon - 250 kilometres west of Alice Springs.

The station is the second part of a pilot project aimed at increasing the use of solar power in the Northern Territory.

The first phase, at the remote Aboriginal community of Bulman, 400 kilometres south-east of Darwin, is also receiving a further 56 kilowatt capacity at its solar facility.

Power and Water says the project will reduce the reliance on diesel fuel for power generation in remote areas.