A company formed by First Nations and Métis in Fort Chipewyan has announced plans to build a $7.8-million solar farm to reduce the community's reliance on diesel to generate electricity.

Three Nations Energy LP (3NE) is receiving $3.3 million in carbon tax money to build and operate what the Alberta government is calling the largest off-grid solar and storage project in Canada.

Fort Chipewyan is close to Alberta's border with the Northwest Territories and is not on the electricity grid.

The solar farm is expected to supply about 25 per cent of the community's energy and annually replace 800,000 litres of diesel fuel. A battery storage system will store 1.5 MWh of power.

Reducing the use of noisy diesel generators is expected to make the community quieter.

The company is owned by the Athabasca Chipewyan First Nation, the Mikisew Cree First Nation and Métis​ Local 125.

The solar farm is scheduled to start operating by the fall of 2020. The project will roll out in phases.

ATCO is installing 1,500 solar panels this winter, which the company will own. Those panels will cut down on diesel use by 150,000 litres.

The remaining 6,000 solar panels will be installed in the second phase, which will be owned by 3NE.

The government estimates 40 jobs will be created during construction.

Fort Chipewyan had a population of 852 people in 2016.