It's being called the largest solar project in the world and is expected to create more than 1,000 jobs in San Bernardino County.
"Some people who look out at the desert see miles and miles of emptiness," Schwarzenegger said. "I see miles and miles of a gold mine of great, great opportunities."
The 3,600-acre plant will nearly double the amount of renewable energy available in the U.S.
Instead of solar panels or wind energy, it will use mirrors to harness the sun's energy.
Its 346,000 mirrors will reflect the sun's rays to a tower. As water inside is heated, the steam created will spin a turbine to produce clean energy.
About 140,000 homes will receive electricity from the plant.
The project's three generating plants will be built in stages between now and 2013.
Federal funds will cover much of the nearly $2 billion cost.
It's one of about a half-dozen solar projects federal officials recently approved for public lands in California and Nevada.
"It all stays within our borders. It's all U.S. technology, it's U.S. focused, it's U.S. jobs and no dollars are going into regimes that don't like us," said John Woolard, CEO of Bright Source Energy, the company that developed the project.
But not everybody likes the project.
"The problem is, a lot of tortoise biologists say this just isn't the way to do it," said Laura Cunningham, who was at the site protesting. "We should be protecting this habitat."
BSE said it has taken the steps to ensure that the tortoises continued to be safe by moving their habitat.