PROVIDENCE — Plans to build the first offshore wind farm in Rhode Island have suffered a setback after the developer failed to reach an agreement to sell electricity to the state’s largest electric utility.

National Grid this week rejected a proposal to purchase energy from a small wind farm that Deepwater Wind plans to build off Block Island. In documents filed with the state Public Utilities Commission Thursday, National Grid says that negotiations with Deepwater have so far failed to yield a “commercially reasonable” power-purchase agreement, mainly because the projected cost of electricity generated by the wind farm would be three times the price of energy from traditional sources.

“The [agreement], in pure financial terms, is uneconomic by a significant margin for Rhode Island customers for the entire term,” wrote National Grid attorney Ronald T. Gerwatowski.

The filing, submitted late Thursday afternoon to meet a deadline set by a new state law, does not signal an end to talks between the two sides. It is, however, a blow to Deepwater, which until now had encountered no significant obstacles in its race with other companies to install the first offshore wind turbines in the United States.

The New Jersey-based start-up company needs a contract not just because it would guarantee a buyer for its electricity, but also because such an agreement would help attract additional financing for its two projects in Rhode Island that will cost a total of $1.5 billion.

Deepwater first plans to install up to eight turbines three miles off the Block Island coast by 2012 and would follow that demonstration project with a much larger wind farm consisting of approximately 100 turbines at least 15 miles from the Rhode Island shore.

The state selected Deepwater as the preferred developer for offshore wind in Rhode Island a year ago. Governor Carcieri has repeatedly voiced support for Deepwater’s projects, saying they would provide clean energy at a stable price for years to come and that they would spur the creation of a green technology industry in Rhode Island.

A spokeswoman for Carcieri said Friday that the governor has personally urged representatives of both National Grid and Deepwater to resume negotiations. “The message was, ‘Sit in a room and hammer this out,’ ” Amy Kempe said.

The governor believes the project is too important to Rhode Island to fail, she said. “There’s no question that in the United States, and particularly in the Northeast, ratepayers have felt the effects of the vast change in energy costs due to the reliance on foreign sources of oil. What the offshore project will do for Rhode Islanders is provide a continuous rate and help break our dependence on foreign oil.”

J. Michael Saul, interim executive director of the state Economic Development Corporation, also said an agreement is crucial. “Deepwater Wind’s project will act as a catalyst to elevate Rhode Island as the hub for the Northeast’s offshore-wind industry, generating jobs at every level of the state’s economy,” he said in a statement.

Under a new law signed by the governor in June, National Grid must enter into power-purchase agreements with green-energy companies. The law requires the utility to first work out a contract to supply alternative energy to Block Island — which relies on diesel generators for its electricity and has some of the highest electricity rates in the country — and then sign a more far-reaching pact for providing alternative power throughout the state. The law allows National Grid to receive a 2.75-percent markup on any green power it sells to consumers.

Deepwater was the only company to apply for the Block Island contract after National Grid released a request for proposals in July. The smaller of Deepwater’s two wind farms would supply alternative energy directly to Block Island with any excess fed into the state’s power grid through an underwater cable.

But National Grid argues the rates from the wind farm would be too high. Calculations by the utility put the cost at 30.7 cents per kilowatt-hour over the 20-year contract, compared to 9.2 cents per kilowatt-hour for electricity from other sources, including natural-gas facilities and nuclear power plants.

Deepwater estimates the sale price to be closer to 20 to 25 cents per kilowatt-hour, though the company is seeking a 3.5-percent increase annually over the life of the contract.

Deepwater executives said in interviews that electricity from the Block Island project would amount to about 1 percent of the total amount of power used in the state. The added cost would be spread among all ratepayers and would have a minimal impact on their bills. They also pointed to the positive environmental effects of investing in green energy and the consistent pricing over time to justify the higher price.

William M. Moore, chief executive officer of Deepwater, said the estimated price of electricity from the Block Island wind farm is higher for a number of reasons. There has been a surge of investment in offshore wind in Europe recently, which has raised the price of turbine components, he said. Also, the project would be the first of its kind in the country, so Deepwater is venturing into unknown territory and taking significant financial risks.

Lastly, the $200 million Block Island project would be relatively small, with only six to eight 3.6-megawatt turbines, but Deepwater would still have to account for certain fixed costs that would be the same for its larger project. Those costs include the price of renting a ship to install the turbines and leasing a staging area at the Quonset Business Park in North Kingstown.

Power from the 100-turbine wind farm would be cheaper because of economies of scale, Moore said. “But there is no way to get to the bigger project without doing the smaller project first.”

According to the new energy law, the Public Utilities Commission can order National Grid and alternative-energy developers to arbitrate disputes in contract talks. The commission has until Dec. 31 to approve or reject a contract proposal.

Both David Graves, a spokesman for National Grid, and Deepwater representatives said that talks are not over.

“We’re pretty flexible,” Moore said. “We haven’t drawn a line in the sand.”