The Implications of Ikea Selling Solar Panels

In an earlier post on this blog, I asked: “How soon will it be before we see retail behemoths like Wal-Mart go from exiting the grid at their warehouse facilities, to actually selling Wal-Mart generated electricity to their customers (want to refuel your electric vehicle at a lower cost than at home? Just top off at the local Wal-Mart recharging station, where power is delivered from Wal-Mart’s roof to your car’s battery in minutes, not hours, at a savings of 10-15-30% lower than the cost of electricity from your home outlet).”

The idea that non-utility entities will move aggressively into the utility arena recently took a significant step toward reality. As described here, Google continues to push into the supply side of industry. Now, just a few weeks after Google’s announcement, Ikea released its plans to sell photovoltaic solar panel packages in its 17 British stores within the next 10 months. The systems, from Chinese manufacturer Hanergy Solar Group, will cost roughly $9,200 for a three-bedroom home. Thanks to subsidies from the British government subsidies, Ikea estimates that purchasers will be able to see returns within seven years.

The implications of these two announcements reach around the world. While utilities, regulators and policy makers continue to debate issues such as the economic and non-economic benefits associated with clean energy subsidies and the question of how much, if anything, utilities should pay for excess power produced by rooftop solar, microgrids, etc., the march toward a new business model in the utility sector continues at an ever-increasing pace.

Of course, questions abound. For how long will government subsidies continue? Will regulators embrace the non-economic effects of renewable energy in a manner that causes further uncertainty to financial markets, or will a standard be adopted that gives utilities, rate payers, financial analysts and regulators assurance that financial models properly reflect both the costs and the benefits associated with renewable energy? How will decisions like Ikea’s influence public policy and vice-versa? Will Ikea’s decision spur additional investment in rooftop solar? Will utility organizations such as EPRI and EEI fight the move to smaller, decentralized generation, or will they and their member utilities lead the way?

No doubt these and dozens of other questions need to be explored by utilities, regulators, policy makers and consumer advocates. How these issues are decided increasingly will shape investments, pricing and utility rates in the months and years to come. Methodically assessing – today – the possibilities that are likely to unfold in the future would be exceptionally useful for all stakeholders.

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