IKEA to Sell Solar Panels In England

NEW YORK (TheStreet) -- The big news today is that IKEA is selling solar panels... in England.

That should not be big news. Home Depot ( HD) has long sold solar panels in the U.S. So has Lowe's ( LOW).

That may not be even the biggest news about IKEA. The bigger news may be that IKEA is shipping $1,000 refugee shelters to Syria in flat packs that limit the ability of President Assad's regime to use human suffering as a weapon against neighbors Turkey and Jordan.

An even bigger finance story may be that founder Ingvar Kamprad, 87, has set things up to maintain his family's control over the $12 billion enterprise and put his youngest son, 44-year old Mathias, into the presidency of the group while also having him run IKANO Group, which extends the family's reach into insurance and finance.

Through a complex, interlocking set of international companies that are as complicated as any set of IKEA instructions, Ingvar has done what Sam Walton only dreamed of doing -- passing his work intact onto the next generation. That's a slick trick.

The solar deal is a pretty slick trick, too.

The company supplying IKEA, Hanergy Group, is practically unknown to Americans, but according to industry publisher PV-Magazine,, it's the next big thing.

Hanergyis a lot like IKEA itself, in that it's privately held and vertically integrated. Its profits come from running hydroelectric dams, with 131 megawatts of power installed, and unlike nearly every other Chinese solar player, Hanergy has focused on Copper, Indium, Gallium Selenide, or CIGS, flat panels.

Like First Solar ( FSLR), the U.S. solar leader -- which uses a competing technology called cadmium telluride, or CdT, for its flat panels, Hanergy has until now focused on utility-scale projects, funded by the Chinese government. The IKEA deal is its first move into consumer markets.

Hanergy's strategy has been to pick up bleeding-edge western companies like over-ripe fruit, once they run out of venture capital, with help from Chinese government funding based on its hydroelectric cash flow.

Hanergy first got into CIGS by buying MiaSole, a U.S. company, for $30 million last year, according to Greentech Media, after MiaSole blew through $500 million in venture funding to develop its technology.

Hanergy also bought the former CIGS operation of Q-Cells, a German company -- Q-Cells and MiaSole used different manufacturing processes. With a $4 billion government credit line, Hanergy brought both technologies in-house. In July, it bought a third company, Arizona's Global Solar Energy, according to Greentech, and was reportedly looking at other bankrupt U.S. assets, including the notorious Solyndra Energy.

Hanergy and IKEA got together in July, according to the China Daily, with a deal to put Hanergy panels on all IKEA stores in China, as well as those of local suppliers. That deal anticipated the present retail offering.

By using CIGS technology, Hanergy gets around the current solar trade war, which involves polysilicon. By buying U.S. and European manufacturing assets, Hanergy also gets around tariffs -- the panels being sold in England are being made in Germany.

By this time next year, Chinese-made Hanergy panels should be a standard offering in IKEA stores around the U.K. at about 5,700 British pounds ($10,000) for 3.36 kilowatts. With British government aid, the company says, the panels should pay off their investment in about seven years.

That $3.36/watt retail price is close to the $4/watt installed cost for the cheapest polysilicon panels. First Solar panels reportedly cost a little over 50 cents/watt to produce, and Chinese polysilicon panels a little less than that. But the Hanergy panels include all the required hardware for set-up. It's a low price.

I wrote recently at Mainstreet that once U.S. government tax credits are factored in, parity with grid energy can be achieved at $4/watt, but that's an installed price.

Installation costs, which include permits and grid connections, remain the big hurdle for all U.S. residential solar companies. Panels are estimated to be just 20% of a solar installation's costs, and so unless IKEA and Hanergy can cut those costs when they enter the U.S., their market will remain limited.

Don't bet they can't do it.

At the time of publication the author had no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Dana Blankenhorn has been a business journalist since 1978, and a tech reporter since 1982. His specialty has been getting to the future ahead of the crowd, then leaving before success arrived. That meant covering the Internet in 1985, e-commerce in 1994, the Internet of Things in 2005, open source in 2005 and, since 2010, renewable energy. He has written for every medium from newspapers and magazines to Web sites, from books to blogs. He still seeks tomorrow from his Craftsman home in Atlanta.

More from Opinion

Sears CEO Eddie Lampert Looks Like He Is Sucking Company Dry

Sears CEO Eddie Lampert Looks Like He Is Sucking Company Dry

Nasdaq Exec: Exchange Is 'All-In' on Using Blockchain Technology

Nasdaq Exec: Exchange Is 'All-In' on Using Blockchain Technology

It's Dumb to Think Legalizing Weed Is Still a Political Issue

It's Dumb to Think Legalizing Weed Is Still a Political Issue

AAP Exclusive: Cramer Says The President is No Longer on the Side of the Bulls

AAP Exclusive: Cramer Says The President is No Longer on the Side of the Bulls

Why It Makes Perfect Sense for Netflix and Amazon to Buy Up Movie Theaters

Why It Makes Perfect Sense for Netflix and Amazon to Buy Up Movie Theaters