IKEA flags selling solar panels “at cost” in Australia, industry reacts

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Flat-pack solar? IKEA says it wants to retail solar panels in Australia, “at cost”, as it has done in the UK and other EU countries. Is this a good thing?

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One Step Off The Grid

News that Swedish furniture giant IKEA is planning to sell solar panels “at cost” in its Australian stores has been met with mixed responses from the local solar industry, with many expressing fears that it will further destabilise – and perhaps undermine – an already over-crowded solar retail and installation market.

New IKEA Australia boss Jan Gardberg, who has previously headed up the business in China, aired the company’s PV panel plans in an interview with 9 News on Tuesday night, as part of a broader strategy to double the retailer’s local market share.

“We have already introduced (solar panels) into the UK market and in Poland and something similar in Japan, and I and the team would like to find a way to introduce that to the Australian market,” he told Channel 9’s Ross Greenwood.

“It would actually be cost-neutral because we believe this to be another positive way that we, as a big company, can contribute for the sustainable life at home for the many people in Australia.”

There are no details yet on when, or how – and using which products – this might happen in Australia, but some speculation is arising based on the offerings in the UK and elsewhere in Europe.

According to Canstar Blue, in the UK IKEA uses PV panels from Solarcentury, and offers three different solar packages to consumers:

– a 3kW solar system for £4,412 ($A7,800);
– a customisable solar system, starting at 3kW for £4,941 ($A8,700);
– and a customised solar system that’s “designed to integrate seamlessly with your roof,” again starting at 3kW, this time costing £6,176 ($A10,900).

And, as of August last year, IKEA also offers battery storage in the UK, sourced from market leaders LG Chem and SonnenBatterie.

According to a report from Greentech Media, the starting price for an IKEA solar and storage system in the UK is “as little as £3,000,” including a 15 per cent discount for Ikea Family loyalty club members.

“But it also cites some significantly higher prices later on, including an installation price starting at £6,925 ($9,157) for a complete system, or about £5,000 for adding a battery that already has PV.

So what would this mean for Australia? And what are the possible downsides?

Among the inevitable cracks about flat-packs, missing screws and Allen keys, comments on a popular industry Face Book page that calls out poor quality workmanship, Crap Solar, indicated some concern that IKEA’s solar bid will confuse consumers.

And, some suggested, it could further squeeze the already slim profit margins of Australian installers, and perhaps lower the quality of installations, just as major efforts are being made to improve industry standards on this front.

Solar the IKEA way: Image IKEA Manchester

Of particular concern was that consumers may not understand that they have only purchased the panels, and that the cost of inverters and professional installation would be an added cost, on top of the solar PV.

“(This) could be the one (thing) to send IKEA broke,” said one comment. “This solar game ain’t no flat pack that can be assembled by dad while yelling at mum.”

“This is going to end badly for either IKEA or installers…” said another. “Most likely both, and definitely the customer. Oh dear. Ever tried fitting off client-supplied IKEA lights?”

Other comments were a little more positive: “Their ‘cost’ would still be more expensive than our profit margin, too much overheads (sic). And they’ll still need to pay installers, so either way we can still get a cut.”

And at least one commenter said they would “refuse to install anything that has been bought by a customer, particularly IKEA.”

But peak industry body the Clean Energy Council, says that as long as IKEA follows the rules and standards of the local market, the competition is a welcome “positive” for Australia.

“Competition is a good thing for customers, and the solar and storage industry is constantly experimenting with different business models to try and deliver the best value possible,” said Natalie Collard, executive general manager Industry development at the CEC.

“As long as IKEA is using accredited solar installers and products from the CEC Approved Products list which meet Australian and International Standards, they are increasing access to solar power for customers and helping to keep prices low – and that’s positive.

Collard did acknowledge however, that buying solar panels was not quite the same as buying a flat-packed set of shelves, and so buying panels from IKEA would not be ideal for all consumers.

“Solar panels and battery storage systems both qualify as a major purchase, and customers who want a higher level of customer service will likely be best served by going to specialist solar retailers,” Collard told One Step.

“These businesses have a very high level of technical knowledge and will be able to provide the best possible advice on finding a solar power system to suit their particular needs.”

And she said that any problems that cropped up, or complaints from installers, would have to be dealt with promptly and effectively.

“We expect IKEA will respond quickly to any concerns about installation quality or performance from the systems that are being sold in-store. IKEA is continuing the trend of large mainstream businesses adopting renewable energy, and this will only strengthen in the years ahead.”

“The Clean Energy Council’s Approved Solar Retailers have all committed to excellence in customer service, a minimum five-year whole-of-system warranty and ethical marketing practices. A list of these businesses can be found at www.approvedsolarretailer.com.au.”

This article was originally published on RenewEconomy’s sister site, One Step Off The Grid, which focuses on customer experience with distributed generation. To sign up to One Step’s free weekly newsletter, please click here.

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30 Comments
  1. George Darroch 7 months ago

    $11k for 3kW? That’s a mightily expensive system. They’ll have to do much better than that now.

    As for the practical matter of installation: Bunnings sell hot water systems and link consumers with branded installers. I don’t see that this would be particularly different.

    • Jon 7 months ago

      $11k for 3kw is expensive when you add install.

  2. Tyler Geihlich 7 months ago

    Is the pricing before government rebates?

  3. Dave Britt 7 months ago

    It’s not actually all that cheap

  4. Bristolboy 7 months ago

    As someone in the UK I can confirm that IKEA prices are low, but certainly not market leading. I see no different why Australia would be any different.

  5. Guy Stewart 7 months ago

    There is already very vigorous competition in the Australian solar market. Wholesale prices and distributor margin are low, I don’t see a lot of edge here for IKEA.

    There are already solar retailing sales companies that sell ‘at cost’ plus gst and make all their money on STC’s.

    It doesn’t sound like IKEA is getting into the installation business, so I can’t really see them having any competitive advantage here at all.

  6. Guy Stewart 7 months ago

    For the most part, cheap solar in Australia is crap solar.

    Bait and switch, no long term support, pheonixing after warranty claims, non-compliance with Australian Consumer Law, etc.

    If IKEA wants to compete at the low end of the market, they have to do so against downright dodgy business practicing competitors.

    That’s tricky, they have overheads, and they have a shop front where unhappy customers can go.

    I hope it ushers in a new world where the cheapest charlatans of the market are driven out, but I suspect instead head office will see there is no money to be made, the floor space can be used for something else made of MDF and cardboard and they pull out of solar in 18 months.

  7. heinbloed 7 months ago

    There is also the option to sell plug-and-play PV systems like for example

    https://www.amazon.de/photovoltaik-plug-and-play/s?ie=UTF8&language=en_GB&page=1&rh=i%3Aaps%2Ck%3Aphotovoltaik%20plug%20and%20play

    Several PV-panel manufacturers do already integrate the inverter in the panel, from there any household socket could be used for connection.
    There is no installer necessary.

    The latest in the market using (Enphase) micro inverters is Panasonic:

    https://www.solarpowerworldonline.com/2018/02/panasonic-announces-new-hit-ac-module-enphase-microinverter/

    I don’t know if IKEA in Australia goes this route.

    • physics2010 7 months ago

      Oh God, you’re allowed to back feed in through a standard wall-outlet in Europe?

      • Bok Choy 7 months ago

        There are 2 types of Solar Systems 1) Grid-Tied, this is where you become an electricity producer and sell some or all of the electricity you produce to the Electric Company in your area. They are not required to buy so get approval first from them. You must use approved equipment and approved installers.
        2) Non Grid-Tied, this is a stand alone system. You can install it yourself using components you choose. Only you use the electricity you produce when produced, or it’s wasted unless you can store it in batteries. Plug & play Solar Systems are this kind. You plug the controller/inverter into your home’s electrical system and then you use the electricity you produce first anywhere in the house before you take from the Electric Company. Again, if it is not used when produced it’s wasted without batteries to store it.

        • heinbloed 7 months ago

          A few corrections:

          There is also guerilla PV and plug-and-play PV.
          The generated power is directly fed into a household socket , the power then consumed within the house.
          Surplus generation is fed into the grid free of charge.

          This grid-donation is free of charge to the grid managers and is not “wasted” but used by somebody somewhere else.
          Since the electricity goes the way of the lowest resistance it would be your neighbor who takes it – and pays for it to the utility which does not have to buy it from a trader or power plant.
          An anti-capitalistic market force 🙂

          • physics2010 7 months ago

            Nah, I think Bok Choy is right. There is actually a risk if you’re back feeding into the grid. You can electrocute linemen who think they’re working on a disconnected circuit. Also, back feeding into an outlet without matching phase is just a waste of power. In a grid-tie it’ll match phase with existing power, but requires power for the PV to ‘sync’. With interactive grid-tie it’ll disconnect from mains power to allow you to run stand-alone. In both situations no power goes back to the electric company unless power is already connected. Phase matching could occur when you plug into the outlet, but for flexibility it would have to work whether there was power or not to match phase against…and therefore no protection for linemen.

          • NickE 7 months ago

            Linesmen should never ‘think’ they are working on a de energized line. They should test it, earth it and test it again before working on it. No one should be touching lines that are not earthed, unless you are working glove and barrier (live line) in which case you are treating it as live regardless if it is or not.

          • physics2010 7 months ago

            Yes, linesman should know better. And all of your neighbors homes that are flooded should throw the switch on their fuse boxes before having fled so you don’t kill them or set their house on fire. There are probably a few dozen scenarios that end up in property destruction/loss of life that were thought of when backfeeding was codified illegal (in the US).

          • heinbloed 7 months ago

            ” There are probably a few dozen scenarios that end up in property
            destruction/loss of life that were thought of when backfeeding was
            codified illegal (in the US). ”

            Name 1 legal case so we all can look at it. Please.

          • physics2010 7 months ago

            Legal case? So not NEC 2014 article 700 or any examples of local codes like N.J.A.C 5:23, you want a legal case where someone was prosecuted? Not sure. When Ronnie Adams from Pike was electrocuted the company was sued for not requiring rubber gloves. Not sure if the guy who backfed was sued. Probably a civil lawsuit at least.

          • heinbloed 7 months ago

            Please link.

            Was there any PV-system (with or without micro-inverters) involved?

          • heinbloed 7 months ago

            Linesmen have nothing to do with PV plug-and-play.

            Their responsibility ends at the consumer’s meter.

          • heinbloed 7 months ago

            Sure the world is wrong and you’re right …;)

            ” There is actually a risk if you’re back feeding into the grid.”

            ——————-

            There is zero risk with a proper PV-system.

            About 200.000 Dutch micro-generators plugged into household sockets must be right. EoN (one of the big European utilities) has sold thousands there.

            The inverter cuts out if there necessary Hertz isn’t met (in Europe it is 50 Hertz) and simply stops delivering power.
            The same method is used with all other PV-systems which are grid connected.
            Try it out and then report back, ok?

            Trade brands are LG

            https://enphase.com/en-us/ac-module/partners/lg

            Jinko

            https://enphase.com/en-us/products/ac-module/partners/jinkosolar

            Panasonic

            https://www.solarpowerworldonline.com/2018/02/panasonic-announces-new-hit-ac-module-enphase-microinverter/

            and many more.

            For the video fans:

            https://www.minijoule.com/en/productinformation/installation-video/

      • heinbloed 7 months ago

        Re. ” ….allowed to back feed in through a standard wall-outlet ..”

        Yes, in some countries.So far in Austria, Switzerland, Netherlands, Portugal.
        Guerilla-PV doesn’t care about the national regulationd, they just do it like me in Ireland.
        As long as there is no risk this can’t be banned.

        The Germans are preparing the DIN-Standard which then will become EU-standard (EN)

        The draft:

        https://www.din.de/en/getting-involved/standards-committees/dke/drafts/wdc-beuth:din21:258182377

        There is no selling of power from these small plug-and-play units (up to 600W or 800W per circuit/fuse board fuse), no metering.
        What goes into the grid is a donation, a free-bee for the grid authorities.

  8. Jeremy Black 7 months ago

    I see a lot of salty Ikea competitors. Most of the comments that appear in the story are obviously from competitors who stand to lose since they make a significant chunk of their profit from panel markup.

    • Guy Stewart 7 months ago

      Panels are literally the most price shopped component of a solar system.

      Australia has one of the most competitive and low margin solar industries in the world.

      There are over a dozen different manufactures, importers, distributors and wholesalers who are all looking for the lowest possible price already.

      I’d be pretty surprised if they were competitive, let alone market changing.

  9. Ian 7 months ago

    Good luck to them. If IKEA gains a significant hold on the market they will act as middle men between customer and installer , where perhaps none exist at present, they will be seeking a cut in the supply chain at the advertising, administrative and warranty level. Perhaps they can do better than others in this space.

  10. Revolutionary 7 months ago

    So…gonna give them to you at cost and ape your ass on installation fees.

    Yep

  11. John in Brisbane 7 months ago

    Same article, different site. I see the original is linked at the top but not explained…

    This isn’t even close to a competitive price, assuming it is in any way comparable with a simple currency conversion. $11k for a 5kw system plus some storage maybe. Batteries might make sense simply for cutting emissions but there is so much secrecy and BS in this sector that I don’t know if that is actually the case.

    Solar has always struck me as being best suited to buildings used all day. Generate power and use it. Boom. The currently available types of storage don’t strike me as being reasonable long-run deals. Too fiddly and too much embodied energy and pollutants. We’re a long way from knowing if they and the PVs will get to their projected lifespans and performance over time. But like the Toyota Prius etc I am sure they’re a stepping stone to the real thing.

  12. mark tiller 7 months ago

    In live in Australia, I’ve installed a 5.22, system, and it cost me $8,000, including mains electricity work, to make the house safe , so ikea should work on there pricing , as I had ja 290 panels, and a fronios primo 5inverter and now a Tesla 2 battery.

  13. Aussie 7 months ago

    This is worse than Kevin 07’s free roof installation Idea.. At least it was free.

  14. Barry Alternative Fact Covfefe 7 months ago

    I was hoping they would bring them to Canada, but also have smaller versions, say pole mounted with a 1-3kWh battery and a small inverter, low cost of entry to dabble in renewable energy.

  15. heinbloed 7 months ago

    That there is no need to bother an installer (DIY plug-and-play) must be told again and again.

    http://www.renewableenergyworld.com/articles/2014/06/plug-and-play-solar-systems-automating-the-permitting-inspection-and-interconnection-processes.html

    Suitable PV systems can be ordered in the internet, for example

    https://www.amazon.de/photovoltaik-plug-and-play/s?ie=UTF8&language=en_GB&page=1&rh=i%3Aaps%2Ck%3Aphotovoltaik%20plug%20and%20play

    I don’t know if IKEA plans selling the plug-and-play systems.

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