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.”
Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
This post was published on February 16, 2018 10:16 am
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Nah, even if those UK costs are seriously wrong when converted to here, panels are already heaps cheaper online. I'm not even slightly interested. Ikea has its place but like jb HiFi, they are not cheap any more.
Buying panels online is fool hardy. Panels must be approved by the CEC before they can in turn be registered buy the CER. This will enable you to get STC's. But the fact their not approved to be used in Australia for systems greater than 380watts.
OK I can see you're replying to everyone. It's cool to advocate for your industry but please don't huff and puff about people being fools. As if I would put something dangerous on my roof. Buying decent gear is a given. There are plenty of places to buy good, certified equipment online. Or don't you want the average person to know that? By scaring them or telling them off?
John, A lot of people buy PV equipment on ebay and other sites and they don't know what their getting. The CEC has deregistered about 85% of panels in 12mths alone. Sure there are good companies in Australia selling good panels online, however there are some dishonest dealers. The fact panels can be heaps cheaper is a signal to anyone to be wary. And compare apples with apples.
One guy recently asked me to install 200w panels he bought from a well known retailer in Sydney for $50 each, but they can't be used. Now I'm not trying to scare people off the completion, just make them realize there are pitfalls and do their homework, before parting with their hard earned. In fact I sell certified panels cheaper at times than the dodgy retailers!
Now tell me how you would know if your buying good gear?
G'day solarguy, re installers disappear, companies fold or go back where they come from, my problem exactly. A year ago after living off grid for 35 years we moved from the bush to suburbia, our new residence is fitted with 21x250 watt Schott panels with i'energy gt 260 micro inverters & monitor, we are unsure of the instillation date, the high FIT rate (qld) was still being paid to the former owners. The monitor (since died) showed one panel not operating & two others quite often slow to awaken in the mornings.
Extensive searching & emails to Taiwan have been fruitless. A little advice on,a) are there any compatible replacement inverters/ monitors, or b) replace all inverters (21) & monitor/app?
Would quite like to participate in virtual generation/micro grid but there doesn't seem to be much action in our area, northern Sunshine Coast.
Looks like you need to contact a local installer. My advice would be to go a string inverter and Tigo DC optimisers where there is shaded panels only, it isn't going to be cheap, but cheaper than all new micro's. That's the way things go.
Thank you for the advice, time for costings.
Thin margins for solar installers – first I have heard of this. We got a company from Vic (750km away) to put in our PV, because the local “experts” were too expensive…We would go broke if we bought local.
Those companies use sub contractors they don't even know that are closest to you. They sell you a system with cheap garbage and pay stuff all to the stupid installers to do the job. Good CEC qualified installers charge $90/hr per person in an install team.
Some of these retailers operate on slim margins hoping to make their money on volume, but won't have the funds to facilitate warranty claims, when the company who sold them the gear won't honour the warranty because thy went out of business, so bad luck there.
Now there are installers out there who are willing to work for far less and get young blokes without any qualifications to do the work for them paying as little as $20/hr.
Subies like these are busting their nuts to do 3 or more installs a day just to make a very slim margin, so they buy the cheapest switch gear and cable and rush the jobs. Their willing to risk their Electrical licenses for peanuts and they do at times.
Result crap installs or part installs.
When things go tits up, I'm one of the guys these bargain hunters call. It's the same old story, the system has been shut down by network inspectors because it's unsafe, in the worst cases. I've seen holes in tiles were these morons have used a hammer to make a hole in the tile, instead of drilling a hole to feed the cable into and haven't even used conduit and then used a whole tube of silastic to seal it up, instead of using a decktite. I could go on.
You wouldn't know if you have been sold good gear or not until something goes wrong. An Inverter might fail and the company who sold it to you don't want to know you when you claim warranty or their out of business.
Would you know if the output of your panels is correct or are the panels the ones you were told you would get, same for Inverters.
Google crap solar.
You get what you pay for!
Thank you. I do want more PV....But this issue was, I had already contracted for the gear. It was the install that the local guys over charged/quoted. As I said to the local guys, I an not happy getting Ducked once, but on the install and the parts as well - no way. Local guys are far too expensive.
Sorry can you be more elaborate about this.
I agree, needs emoticons and maybe gifs.
How on earth can those prices, $8000 odd for 3 kW of panels alone, be viable, when a complete 5 kW system, fully installed with a high quality inverter, costs only $8,200, and falling.?
Somebody's dreaming.
Yep it's BS! Way too expensive.
Buying a package deal from a well know retailer is appealing because you have an idea of what you should expect rather than dealing with some local Joe who you know nothing about and (if the example of most of our local electricians is followed) may or may not turn up at any given time, may start the job but never return to finish it etc
Are you kidding the local Solar businesses are the one's who have the knowledge and will see that your system is done right. After all it's our lively hood. Leave a bad taste in somebody's mouth you won't survive in the market.
Nick, it's NOT a package deal. It's panels only. And who knows what 3rd rate crap panels, at that.
Installation, inverter, electrical connections all extra.
Mug punters will think - it's Ikea, it must be good value. But Ikea stuff is only good value if you assemble it yourself.
I love Ikea. Have had two full scale kitchens, including my current one, which I assembled myself, but were installed by the builder. Vastly less costly than specialist kitchens.
But solar panels? No way.
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