Swiss energy group Axpo and partner IWB will develop a 2.2 megawatt solar plant high in the Alps and sell the power to supermarket chain Denner in a 20-year deal that makes more environmental than financial sense, the partners said on Thursday.
The Muttsee site at a dam 2,500 metres (8,200 ft) high in the Alps will be the largest alpine solar plant in Switzerland, with nearly 5,000 solar modules producing around 3.3 million kilowatt hours of electricity per year.
"Unfortunately, the lack of a regulatory framework means that this type of plant is barely economically feasible, as is the case with this project. Nevertheless, we have chosen to carry out this flagship project with our exceptional partners to make a statement and push Switzerland's energy transformation a step further," Axpo chief executive, Christoph Brand said.
IWB, the energy supplier for the canton of Basel-City, has a 49% stake in the project.
The alpine location will let the Muttsee plant deliver half its production during the colder half of the year, when sunlight is generally in short supply in Switzerland.
Solar plants at lower elevations produce only around a quarter of their electricity during this half of the year.
The solar plant will be commissioned in summer 2021.