Flask config class

I am trying to setup config classes for my project but I can't seem to figure out how to import them properly.

Project structure:

-project
  -instance
    -config.py
  -service
    -__init__.py

config.py:

class DefaultConfig(object):
    DEBUG = True

class ProductionConfig(DefaultConfig):
    DEBUG = False

__init__.py:

from flask import Flask

def create_app():
    app = Flask(__name__, instance_relative_config=True)
    app.config.from_object('config.ProductionConfig')    
    return app

To run the app I did:

set FLASK_APP=service
set FLASK_ENV=production
FLASK run

While standing in the project folder

That gives me this error:

ImportStringError: import_string() failed for 'config'. Possible reasons are:

- missing __init__.py in a package;
- package or module path not included in sys.path;
- duplicated package or module name taking precedence in sys.path;
- missing module, class, function or variable;

Debugged import:

- 'config' not found.

Original exception:

ModuleNotFoundError: No module named 'config'

My guess is that the path is not right. I followed this example, where they talk about using inheritance for configuration and instance folders. It made a lot of sense when I read it but I must have managed to misinterpret an integral part.

EDIT: Now it works. Instead of just

app.config.from_object('config.DefaultConfig')

I had to do

app.config.from_object('instance.config.DefaultConfig')

I think that is really confusing because setting the instance_relative_config to True like I did, should according to the docs set the path for the config files relative to the instance directory. Now I am accessing them relative to the project root...