Last month, Ikea announced that it would be ‘launching’ a battery storage offering to sell alongside its solar panels in the UK. Only a week earlier, Siemens announced that it would be joining forces with AES to create a global force in energy storage.
The news from Ikea was viewed by many in the industry as a big deal, with many excited that such a well-known consumer brand could be ready to push storage into the UK market.
But in a world where energy storage will play an increasingly important role in balancing renewables, reinforcing the network and reducing energy costs, how important will ‘brand’ be?
Confidence in the product is paramount to protect a well-known brand
The thing is, storage and PV wasn’t a completely new Ikea offering. Ikea had been offering storage with its PV systems for some time to any customers who asked for it. The company had been soft trialling the products for a while before making any big announcement. The Swedish firm has been built up over more than 70 years and companies of this size and heritage don’t risk it over what will be initially an extremely niche offering (Ikea sells one of its ‘Billy’ bookshelves every three seconds with one-tenth of furniture purchased in the UK coming from the store).
Brands know the importance of timing
Some of the more cynical among us will have noted that the Ikea announcement came hot on the heels of Centrica’s planned electricity price rise. However, July to August also saw other important stories for energy storage, including the publication of the UK Government’s Smart Energy Plan by BEIS and Ofgem, and the announcement that there would be a tax break on battery systems when supplied with solar panels. The resulting increase in attention for energy storage can be shown by the spikes in search interest according to Google Trends (see Figure 1), both before and after the Ikea and other announcements.
Source: Google Trends, 2017
Brands know what makes their customers tick
Large consumer brands recognize what it takes to motivate customers. And so they should. Linked to our earlier point, Ikea may be betting that energy prices are the key to UK customers’ wallets when it comes to investments such as PV and energy storage. Customer motivations for energy storage products are something we’re exploring much more with the Delta-ee in-house customer panel and as part of our Energy Storage Research Service.
Brand is important but it does not guarantee success
In summary, ‘brand’ will continue to be important in the world of new energy because of the experience companies like Ikea have when it comes to launching new products and finding ways of creating customer value. Therefore, we expect to see more technology-focussed energy storage companies try to harness this ‘brand power’ by partnering more with well-known names.
However, this does not guarantee success; a 360-degree view of the commercialization challenges will be needed for successful storage product launches, as well as the ability for finding and appealing to the right customers.
Scott Dwyer is Principal Analyst at Delta-ee