Ikea's New Solar Panels: Sunshine Optional, Subsidies Required

http://www.businessweek.com/articles/2013-10-01/ikeas-new-solar-panels-sunshine-optional-subsidies-required

by Edvik • 13 years ago

66 84 13 years ago

xutopia• 13 years ago

If they put as much effort into this as they did in the kitchen cabinet software they built I expect to see a lot of people using this.

IKEA has a knack for packaging things in such a way that works for people.

spongle2• 13 years ago

Although I can say that nothing I've bought at Ikea has lasted a terribly long time.

Tend to go for non chipboard and non UV sensitive plastic stuff now that you can actually clean and leave in the sun without destroying it.

DanBC3• 13 years ago

IKEA has a bizarre complex business setup which ends up with IKEA being the world's largest (and nearly least generous) charity. (http://www.economist.com/node/6919139/print?story_id=6919139)

hosay123• 13 years ago

This seems fairly straightforward to understand compared to the tax avoidance strategy Google employs in Europe ( http://www.parliament.uk/business/committees/committees-a-z/... )

quarterto• 13 years ago

I don't see how that's relevant to the article in hand.

DanBC3• 13 years ago

IKEA promotes itself as ethical and clean. Selling solar panels is part of this marketing buzz that IKEA has created. This submission is a direct result of IKEA marketing.

Some people may not want to buy from a company engaged in such vigorous tax avoidance.

teamonkey• 13 years ago

Photovoltaic panel systems costing £5,200 ($9,212)

With the exchange rate at 1.62 USD to the GBP, I can't imagine how they got that dollar figure. Remember that UK prices include sales tax @20%, so that puts the retail price at about USD$7000 pre-tax.

objclxt• 13 years ago

Remember that UK prices include sales tax @20%

Solar panels are charged only 5% VAT, not 20%.

jdmitch• 13 years ago

It doesn't sound like it is sustainable to have these subsidies for very long:

- At current rates the Feed-in Tariff pays you 14.9p for every kWh you produce, whether you use it or not. The Feed-in Tariff is TAX FREE and RPI Linked.

- Export your excess electricity to the grid and earn an additional 4.6p/kWh.

(http://www.hanergy.co.uk/why-solar/feed-in-tariff)

xbryanx• 13 years ago

It does if you factor in the extremely expensive, yet largely unaccounted for, costs associated with generating electricity from coal.

fooqux2• 13 years ago

Where are you getting your information? What assumptions are you making here?

It looks to me that coal is one of the cheapest forms of generating electricity there currently is. [1]

[1] http://en.openei.org/apps/TCDB/

nmeofthestate• 13 years ago

That depends on how you define "sustainable". So far, a perhaps pessimistic assessment of sustainable energy is that it's driving up energy costs, while reducing the increase of CO2 emissions by only a very small amount. It's increasing fuel poverty and deaths from cold weather events, and ultimately it will drive business out of the countries that are building sustainable energy into countries that have cheap energy, by making business uncompetitive. Then, people will buy products from the cheap energy countries that are emitting CO2 (although they'll be poorer, so perhaps they'll buy less).

corresation2• 13 years ago

In Ontario you get 39.6c per kWh fed into the grid, down from 54.9c per kWh last year. Worth noting that when you hook in and sign up, your rate is guaranteed for, I believe, 25 years (meaning reductions, which are surely going to continue, impact new builds). It is completely unsustainable and is not rational pricing, but instead is built around the notion of bootstrapping the industry through subsidies, and it does seem to be working -- solar panels are getting more efficient and less expensive as a result of programs like this, which would never have happened had they been left to their own merits.

I should add that the Ontario program also demands a percentage of domestic content of installs as well, again trying to bootstrap a domestic industry rather than simply benefiting foreign manufacturers. As a result various solar manufacturing businesses have arisen here.

ripter• 13 years ago

Calling it a subsidy seems weird to me. Every state I've lived in will pay you if you generate more electricity than you use. You are providing power back into the grid, of course you should be paid for it. That doesn't sound like government support to me.

corresation2• 13 years ago

It's a subsidy if they're paying residential solar power generators more than they would pay other power sources. I don't know if that is true in the UK, but again to use Ontario as an example, here you get paid almost $0.40 per kWh, while on the open market the power authority pays just $0.03. The difference is a substantial subsidy.

jadc2• 13 years ago

It is called a subsidy because the feed-in-tariff you get is generally more than the market rate for the electricity produced. Also in many countries, you lock in a certain tariff for many years (20-25 years) so the amount you get paid vs market rate diverges even more over time.

walshemj7• 13 years ago

The problem is that this is a tax dodge for rich middle class people - at one time selling your solar energy back to the grid you got 8% return for 20 years guaranteed by the government.

Even after the scheme was amended its a nice little subsidy for richer people it's the poor sods on key/coin meters that are paying for this.

huherto3• 13 years ago

Will this create a scale economy to drive down the cost? Which may end up helping the (not rich) middle class.

bborud3• 13 years ago

I find it disheartening that every technology that takes us in the right direction, but which is not yet cost effective, is constantly pissed on by people who expect immediate solutions and who fail to see that these things are not going to develop themselves.

Sure, it is a tax dodge for rich middle class people, but if people could just keep their envy in check for the decade or two it is going to take to bring costs down and sustainability up, this is going to benefit a lot of people.

How else are we going to incentivise companies to develop better solar panels? Seriously, I really want to know.

We are seeing the same thing with the Tesla Model S in Norway right now. On one hand people dismiss electric cars because they are not yet as sustainable as we would like them to be. On the other hand they get their panties in a bunch because you can now buy a really good car (with amazing performance) at the same price as a regular car. In Norway the Model S costs ~550k NOK. A petrol-powered car with the same performance figures costs ~1,500k NOK -- nearly 1,000k NOK being taxes. (Interestingly, the Model S is the first electric car that many people would consider buying as their only car. So far, electric cars have been toys for people who can afford a second or third car, and who want to park for free and use the public transport lanes).

It is going to take a lot of development to make solar panels sustainable. The more of a market we can create for them, the quicker development will take place and the quicker they will become available to broader segments of consumers. And we'll just have to tolerate that to push the industry forward, we will have to dangle some incentives in front of those who are able to take part.

kamjam• 13 years ago

There was a great TED Talk by Elon Musk. He says every new product needs to go through at least 3 iterations before becoming mass market, and Tesla is currently at iteration 2.

http://www.ted.com/talks/elon_musk_the_mind_behind_tesla_spa...

walshemj7• 13 years ago

Yes but giving vast tax breaks to upper middle class people isn't the way to do it and i say that as some one who could easily have done that (we have a v nice roof facing in just the right direction)

Did you not see the original 8% tax free return for 20 years I mentioned - the uk 10 year yield is currently 2.7%

polshaw2• 13 years ago

A business sector has arisen to address this issue- companies will pay for and install the panels for free, allowing the household to consume the electricity for free, whilst the company will profit from the subsidy for the generation.

Of course, those with the capital themselves are going to do better still, but that is the very nature of capitalism, hardly unique to this issue.

IgorPartola• 13 years ago

rich middle class people

That is an oxymoron. By definition, middle class is in the middle, not rich.

adam-a• 13 years ago

From the perspective of a working class person, a middle class person could be considered rich.

I was going to make a point that the middle class, being in the middle of the income-population pyramid, are more wealthy than the average. Interestingly, in the UK at least, 71% are middle class, which spoils that [0].

[0] http://britainthinks.com/sites/default/files/reports/Speakin...

walshemj7• 13 years ago

Class has nothing to do with how much money you have especially in the UK.

mmagin• 13 years ago

yawn Nothing much to see here.

Do something about the labor and permitting costs of a solar install in the developed world and I'll actually be impressed.

steven20126• 13 years ago

I'm super excited about the promise of solar panels, because my house has unobstructed exposure to the sun, and I live in the Bay Area, so we get sunshine 300+ days per year.

However, every time I revisit the math, it never works out. Even if I purchase it myself, the payoff times are never less than around 17-20 years, depending on how aggressive I project the rise in electricity rates. Given that solar panels have a serviceable life about 20 years, it still isn't cost effective yet.

But I'm getting more and more optimistic that in the next few years, we'll reach a level where solar panels make sense.

huherto3• 13 years ago

Can you take advantage of the shade from the Solar Panels?

If you can install solar panels above the ceiling with enough space to keep the air flow, it can help you keep your house fresh and comfortable during the day. Specially in a hot and dry climate.

driverdan• 13 years ago

The Bay Area is not a "hot and dry climate."

ChuckMcM4• 13 years ago

I've found that my panels keep my attic probably 3 - 5 degrees cooler than before the panels were installed. So it's definitely a benefit. I don't have air conditioning and on warm days this keeps the house from heating up.

wolff• 13 years ago

Are you factoring in that you can stay hooked up to the grid and sell extra power back to the energy company?

steven20126• 13 years ago

Yes, I used some online calculators that predicted how much electricity I generated based on the size of the array, the amount of electricity I used, and how much I could make selling the electricity back, as well as rebates, etc. I can't remember the actual link for the calculator, but it was pretty thorough. Of course, there was a lot of guessing that needed to take place, like the rise in electricity prices, etc.

And as far as I remember, the ability to sell electricity back to the utility like PG&E isn't something that is guaranteed in the future. However, I could be wrong about this point.

michielvoo• 13 years ago

Do you factor in an increase of the price of your home when you sell it?

steven20126• 13 years ago

I would guess there is likely no increase in house price, especially for current solar panels. If I live in the house for the next 10+ years, it's questionable what value a 10-15 year old solar panel array will have, especially if the next owner will need to either change them out or remove them in 5-10 years

JRobertson• 13 years ago

If you're sincerely interested in solar panels you should look into doing it yourself. It's not as complicated as many of the solar retailers want to make it out to be.

Step 1) Buy panels direct with mounts Step 2) Mount the panels yourself. They aren't super heavy, just fragile. The tricky part here is measuring and drilling the holes you need to get them secured to your roof properly. Or buying a slanted frame if you have a flat roof. Step 3) Hire a licensed electrician to wire them up.

That's pretty much it. Total cost for a 9kw system will run about 13-15k after the electrician. You'll get 30% (almost 4k) back in rebates bringing your total cost out somewhere around 10k. That's a 5-7 year payback for your average american home.

There are a number of online solar panel distributors that are reliable and have been in business for quite some time.

steven20126• 13 years ago

This is interesting about DIY. I'll research this a bit more, thanks for the info.

marvin• 13 years ago

Isn't there a good, cheap solar tracking system available yet? Seems like you are leaving a lot of money on the table by not keeping a ~90 degree angle with the sun at most times during the day.

ChuckMcM4• 13 years ago

Hmmm, that seems broken. I installed 5.2KW of panels on the roof of my Bay Area home in 2002, at the time panels were a lot more expensive but the subsidies were better too, I ended up paying just about $20,000 for the complete system (after rebates and with all parts, labor etc). The system is grid tied (meaning it feeds back into the grid) and we switched our billing to a watt for watt basis (not time of use as my kids were being home schooled and we were in the house 24/7). My electricity bill is now annual (the net power usage is computed from the Anniversary date, and any power I've used in excess of my generation is charged at a flat fee). My typical annual power cost is < $200 and occasionally less than $100. There is zero maintenance other than rinsing the panels off twice a year, and trimming the trees to avoid shade.

By calculating my what my electricity bill would have been vs what it was, they have saved me more than their cost (at some point I should go back again and get exact numbers).

Its entirely unclear how much "additional" value they give the resale value of my house. It is clearly some, but I don't have a good way of knowing if it is $20,000 or more.

At the time we financed the purchase as part of a refinancing of the house, so we did know the interest cost for the money, we also went through the great Recession so in traditional financial analysis (the 'do nothing' option) we would have predicted our money would have had a better return than it actually did, although that didn't really change the math all that much.

So I can't see how you don't get it paid off in < 10 years these days. At this point I'm thinking of adding another string to offset the addition of an electric car.

steven20126• 13 years ago

http://www.gosolarcalifornia.org/tools/clean_power_estimator...

Using this calculator, pick a zip code in the Peninsula, I put in a 4000 watt system, estimate my bill to be $200/month, assume 2.5% increase in electricity prices per year, and assume I pay in cash. This gives me a 15 year payback period. At $100/month, it's a 24 year payback period.

g8oz• 13 years ago

That calculator is assuming $10,000 per Kw of capacity. Decent Chinese panels are $500 per Kw on eBay. Can the balance of system (inverters etc), permitting and installation be that expensive?

ashayh• 13 years ago

I look at it from another perspective.

Many people in the bay area have expensive homes and cars. People do not think twice about over bidding 50-150K when buying a house. In fact, that's the only way to get one here, and that's what we did. Its also common to spend crazy amounts on home renovation.

Then people also get an expensive Tesla or some other car that costs 50K or more.

But far fewer people would rather spend the 25K on solar and see a guaranteed return of investment of 150-200$ a month for the next 20 years. And the energy cost is guaranteed to be the same per watt throughout that period.

Regardless of whether you buy or rent, you _have_ to pay a power bill. Mine regularly crossed 150$ a month while renting. And I will continue to have a power bill till I die (40-60 years?). Why not lock in the price for the next 20 years at least?

rwmj• 13 years ago

Does anyone know if this includes the inverter?

I just built an office which has 4x3m of roof on which I could easily put panels (fit them myself, I don't need someone to do that). But the cost of the inverter has put me off, and there doesn't seem to be any alternative way to power computers from it. Ideally I'd have a battery and 12V supply just to power the computers and gadgets, I don't need full mains voltage, nor do I need to feed back into the grid.

derekp7• 13 years ago

I've seen a few 12 volt ATX power supplies available -- seems to be a bit more expensive ($200 - $300 range), since they are lower volume (specialty) items. Another option would be to use a smaller inverter like you get for a car (they are around 150 to 400 watts, priced about $30 or so), and have one of them for each device you want to power.

Just remember if you are running 12-volt DC, it requires fairly thick wiring to get the same current as you would with 120 volt AC.

miahi• 13 years ago

Depending on hardware, you can get a PicoPSU or similar ATX power supply at ~$50, but they are usually limited to 160-200W - so no fancy quad core desktop CPU or powerful graphics, but 200W is plenty for a normal PC.

Some LED displays also have an external power brick - if that's 12V then you can wire them to your grid. Unfortunately most of them will have higher voltage to reduce wire costs and losses.

If you can replace at least part of the AC power with 12V DC power, you can then buy a lower power (cheaper) inverter for the AC power.

infinotize• 13 years ago

Tangental observation: it's interesting that a large number of people are really enthusiastic about changing to solar, moving away from carbon-producing energy sources, etc. But when it comes down to it, even for those people the response is usually "the math just doesn't work" for solar. I wonder if in surveys how many people would say they would pay a little extra for clean energy, until it's actually time to shell out?

mjn• 13 years ago

One place to look for numbers more solid than people just claiming they would pay more, could be in areas with deregulated markets for home electricity, like Texas, where people have a choice of generation provider. Since generation is decoupled from transmission and maintenance, providers don't compete on reliability, but mainly on price and environmentalism. The "green" plans are typically $0.02-$0.04/kWh more expensive than the cheapest plans. Would be interesting to know what proportion of people opt for one.

Examples of such a provider and the plans: http://www.greenmountain.com/texas-oncor

ag802• 13 years ago

Centerpoint has some overall price data they monitor at http://www.mytruecost.com, though at present it doesn't include distinctions between electricity sources. I submitted some feedback via their contact form suggesting they should put some data together.

toomuchtodo3• 13 years ago

I live in Schaumburg, a suburb of Chicago. Recently, ballot measures were passed by local communities across Illinois that allow the communities to collectively negotiate with power providers for their citizens. I used to pay ComEd (incumbent generation/transmission provider) 7-8 cents/KwH for power (nuclear-generated by their Byron, IL facility). I know pay a provide 5.5 cents/KwH for "green" (wind-generated) power. The cost for non-renewable power was only 0.5 cents cheaper per KwH.

cperciva• 13 years ago

Britain isn’t known for an abundance of sunshine, but Hanergy’s solar panels are designed to generate electricity from ultraviolet rays rather than sunlight.

Seems to me that these solar panels are designed to generate government subsidies more than anything else...

7952• 13 years ago

The government in the UK is by far the biggest player in the energy market. For example in any offshore energy development they are the land owner, planning authority, biggest planning consultee, regulator, and may tax and subsidize.

Market competition in energy is arguably more about access to capital than consumer choice. Currently individuals provide most of the money through tax and bills but only large energy companies can easily access the resulting capital. It is wrong to criticize individuals for wanting access to this money.

jadc2• 13 years ago

More constructive criticism would be to offer some information on the expected efficiency of these panels as opposed to just dismissing them.

wehadfun• 13 years ago

KB Homes makes solar panels an option http://content.usatoday.com/communities/greenhouse/post/2011...

DanBC3• 13 years ago

I'm a bit surprised that China has produced too many panels. People keep talking about the coming eco-apocalypse from countries like India and China becoming more developed and needing more electricity, and not having the capacity to generate that cleanly.

Chinese mining has a lousy safety record, even for a dangerous industry. (15 people PER DAY dying just from volatile gases, in 2010) Anything that offloads electricity generation from dangerous mining for coal powered stations is a good thing for China. So I'm not sure why they're not just putting these solar panels on every roof.

(http://www.wvcoalmining.com/coal-news/reducing-chinese-coal-...)

(http://www.mining.com/coal-mining-deaths-in-china-lead-to-mo...)

(http://www.scanimetrics.com/condition-monitoring-news/13-equ...)

petercooper2• 13 years ago

I have the means and the property (albeit small) to do this but.. no chance. The main payback (ignoring the environmentalism externality) is dependent upon a government subsidy rather than actual savings or efficiency gains and as soon as it suits them, the government can yank the benefit away and you're sat with an expensive piece of plastic on your roof that'll take 20 or more years to pay for itself. (I seem to recall the government encouraging the use of diesel in the 80s and LPG in the 00s through reduced duties, yet both are now in the same sky high ballpark as petrol once their respective efficiencies are taken into account.)

dangravell• 13 years ago

Is that true for these particular subsidies? Or has the UK government committed to them over the coming 15-20 years? I thought the latter.

petercooper2• 13 years ago

Hopefully someone who knows for sure will comment, as I didn't know that. Even if they did, though, I'm not sure I trust the government to stick to a long-term promise because I'm not even convinced the state pension will still exist when I reach my 70s ;-)

qwerta2• 13 years ago

I find this article bit too skeptical. Solar panels improved a lot in recent years, and you can break even with investment even in UK without subsidies.

My friend in Czech Republic is a software developer. He works from home and his house is not connected to grid. He has 12-volt house grid with dozen car batteries. His office has 2 LED screens. Everything is powered by solar energy, except once a week he runs a generator for one hour to do a laundry. Heating and cooking is done by solid fuels and gas. Investment into solar panels and grid was about 6000 euro.

ctdonath2• 13 years ago

Bravo!

A key under-discussed factor therein: making it work necessitates a deep change of lifestyle. 110v always-on >50 amp service normalizes comforts and conveniences ("OMG I have nothing to wear tomorrow" laundry, smooth-top electric stoves 'cuz they look nice, no concern about peak usage, weather awareness, gratuitous A/C usage, vast non-12v product availability, etc.), and most people really don't want to give that up. I grew up on wood heat & other off-grid norms in a cold climate; much later in life I realized that what I considered normal and pleasant, most [sub]urbanites recoil from in horror.

spongle2• 13 years ago

I could do the same myself and certainly will next year. The only appliance I have that consumes mega power is the washing machine. I've got a gas Aga that can be converted to solid fuel if need be and provides most of the heating as well and the only other things already work on 12v.

I don't own a toaster, dryer, kettle, microwave or massive television. I have LED lighting everywhere as well and have programmed my family to turn the lights off.

3 children, 2 adults, 2 guinea pigs = £230 a year in electricity!

Not bad for a tech family.

only problem is losses associated with 12v wiring.

I probably don't have to fish out €6000 either for my needs.

qwerta2• 13 years ago

Most electronics use low-voltage DC internally. You only need DC-DC converter with stabilizer to run 32" TV. My friend also has microwave and fridge, all 12V.

DrPhish• 13 years ago

You can get a 6.5kW system from wholesalesolar (with inverter and gridtie kit) for almost exactly the same price. I don't know what the ikea system is rated for, but I'm guessing less than that. 6.5kW should do for pretty much any domestic residence, clouds or no, assuming you have the room for 24 panels. I'll be picking one of these up once prices dip down to $1/W all costs included (it's about $1.50 right now, with racking still extra)

Ikea's New Solar Panels: Sunshine Optional, Subsidies Required

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