The Luna tower (otherwise known as the Eclipse Tower) used to be hidden under the Belinsk Ruins, but after the activation of the Alchemy Dynamo, it can be found in the town of Belinsk behind the Palace.
The Jenei built the Luna Tower to harvest the the power of the sun (most likely to be Light Psynergy rather than heat or light). It does so by blocking the sun via a lunar eclipse (an event refered to as the Grave Eclipse) and then absorbing the light. An unfortunate side-effect of this is that anywhere under the shadow of the Grave Eclipse is subject to spawns of unusually strong monsters.
The Tuaparang and Arcanus (mainly Blados and Chalis) are mostly responsibly for the activation of the Luna Tower and by default the Grave Eclipse: they manipulated Volechek into detaining Eoleo and Hyou Ju by telling him that should he keep them prisoner, and they would give him access to a powerful weapon (the Luna Tower) to aid in defending the people of Belinsk. This provoked a failed attack from Briggs as well as an unsuccessful attempt from Ryou Kyou and Huo Zan at infiltrating Belinsk.
Both parties however sought help from Matthew's group requiring them to sneak into the Belinsk ruins and attampt to infiltrate the palace from below.
Unfortunately, for this plan, they would need to obtain the Magma Orb from a Mountain Roc found atop Talon Peak and activate the Alchemy Dynamo, something that Laurel specifically warned them not to do. The group decide to heed Laurel's warning, but Ryou Kou (who said that he never made the promise) steals the newly acquired Magma Orb, and activates the Alchemy Dynamo in order to save his sister Hou Ju, thus triggering the Luna Tower and its Grave Eclipse.
To rectify this, the protagonists activate the Apollo Lens through the use of the Umbra Gear and used it to fire concentrated light at the Luna Tower, thereby ending the Grave Eclipse and deactivating the Luna Tower bestowing the people of Belinsk with Light Psynergy as a side-effect.
The Luna tower was later renamed Sol Tower after the activation of the Apollo Lens.