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.
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.”