The outbreak was detected at the Topaz Solar Farm and California Valley Solar Ranch in San Luis Obispo County, the Los Angeles Times reported Tuesday.
Fungal spores that are breathed in when desert soil is disturbed are the source of valley fever. While the illness isn't contagious, it is found in many parts of the California desert and is common among farm laborers and construction workers.
Fewer than half the people who contract it develop flu-like symptoms but it can cause death in people with compromised immune systems.
Valley fever cases in the Southwest increased 90 percent from 1998 to 2011, the Centers for Disease Control and Prevention report. From 1990 to 2008, 1,451 deaths in California were attributed to valley fever, a journal article stated.
The disease has killed dozens of inmates in Central Valley prisons since 2006, Dr. John Galgiani, a valley fever expert at the University of Arizona, said. This week, federal officials ordered the relocation of more than 3,000 inmates considered vulnerable to the illness.
California officials are working to stem the outbreak but Galgiani said they should contact the CDC for help in what he called a "public health emergency."