Ikea: Aggressive Energy Goals Producing Business Boon

by | Feb 11, 2014

Ikea’s commitment to renewable energy and energy efficiency is leading to long-term business benefits, reports Forbes.

The furniture retailer currently owns 157 wind turbines — 96 of which are currently operational — that represent 345 MW. The company has also installed 550,000 solar panels totaling 90 MW. In short, Ikea has as many renewable resources as some energy companies. The company has a 2020 goal of producing more energy than it uses.

According to Steve Howard, the company’s chief sustainability officer, the energy plan is the result of a “rational business decision with a decent payback.”

At any business there is a choice as to where to invest capital, and at IKEA, he argues, it makes the most sense to invest in energy production. Doing so provides free electricity and insulates the company from the volatility of the electricity markets — the most unpredictable markets on the planet, according to Forbes.

The cheapest energy, according to Ikea’s philosophy, is that saved through energy efficiency measures. Since 2010, the company has saved $54 million in warehouse energy efficiency programs including HVAC and boiler upgrades and new energy management systems, Forbes reports.

The same sustainable philosophy that drives the business model is affecting Ikea’s customers too, which with a retailer this size is a significant amount of the population. For example, Ikea has committed its stores to being 100 percent LED lit and its customers have bought 22.4 million LED – including 12.3 million LED bulbs, Forbes reports without giving a timescale as to when these sales took place. Presumably, taking advantage of economies of scale Ikea now sells the 40 watt-equivalent LED bulb for $4.

In September, the retailer announced plans to incorporate geothermal technology into the heating and cooling system of its future Kansas City-area store.

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