The world's largest photovoltaic electric power plant will be built in San Luis Obispo County, Calif., under agreements announced yesterday by Pacific Gas and Electric Co. and ARCO Solar Industries Inc., a subsidiary of Atlantic Richfield Co.

Using energy from the sun, the 16-megawatt facility will produce about twice as much electricity as all the photovoltaic systems throughout the world last year.

PG&E has acquired a 640-acre site that will house the utility's first commercial-scale solar cell facility. The site is on the Carrisa Plain in eastern San Luis Obispo County, about 70 miles north of Santa Barbara.

PG&E will purchase all electricity produced by the photovoltaic plant, which will be designed, built, owned and operated by an ARCO Solar Inc. subsidiary. The contract covers peak output of up to 16 megawatts, enough to serve 6,400 typical PG&E customer households. The utility will also study the performance of the facility to gain greater experience with what ARCO Solar officials say they hope will be only the first of several such solar cell power plants to be built for different utilities.

"PG&E welcomes the ARCO Solar project," said George A. Maneatis, executive PG&E's vice president for facilities and electric resources development. "We are pleased to participate in a major photovoltaic installation in our service territory and are encouraged by the potential of this solar resource."

The first phase of the project, generating a peak output of approximately six megawatts, is slated for completion in one year. ARCO Solar said it is seeking financing for the second phase, which is expected to benefit from federal and state tax credits for renewable energy systems.

(California Gov. George Deukmejian has said he wants to rescind the state tax credits, retroactive to last Jan. 1, but is waiting for a ruling from the state's attorney general on that. State legislators have introduced a bill to extend the credits, due to run out at the end of the year. This proposal has considerable support, but a veto is considered likely.)

ARCO Solar has hired Fluor Engineers Inc., a subsidiary of Fluor Corp. of Irvine, Calif., to provide detailed engineering, procurement, design and construction. ARCO Solar also contracted with Helionetics Inc., also of Irvine, to provide nine sets of its Delta Electronics Controls equipment, each capable of converting 700 kilowatts of the direct-current electricity generated by the solar cells to the standard alternating current generated by conventional utilities.

ARCO said construction is expected to begin as soon as permits are granted by local officials.