IKEA announced on Thursday that it will buy a wind-energy project in eastern Illinois as part of the company's move toward renewable energy.
While the project has not yet been built, IKEA Chief Financial Officer Rob Olson said the company will financially benefit from the long-term use of wind energy, according to The Sacramento Bee.
Olson added that the project, called Hoopeston Wind, is IKEA's first large-scale wind project in the U.S. The wind farm is expected to be completed in 2015, and will be able to generate power that equals 165 percent of IKEA's U.S. needs of electricity. The company is looking to complete its switch to energy from renewable sources by 2020.
"That's why we started looking at wind turbines," Olson said. "It was able to move us much further, at this point surpassing our goal from a U.S. perspective."
The project is being built and run by Apex Clean Energy, a green power company based in Charlottesville, Va., The Los Angeles Times reported. Steve Howard, chief sustainability officer at IKEA, said the deal will benefit the company's business as well as the U.S.'s independence from energy.
"The U.S has amazing wind and sun resources that will never run out," Howard said.
IKEA is best known for designing and selling furniture and other home products. The Swedish company has invested in many renewable energy projects in the past, which include wind farms in Denmark and Canada and installing thousands of solar panels on its buildings in nine countries.
Olson did not reveal the cost of the deal, The Sacramento Bee reported. He said that the company will receive some form of government incentives for the Hoopeston project, but added that the project is not a public relations tactic.
"Part of that calculation isn't just the immediate return on investment," he said. "It's also looking at the future growth in energy costs and making sure we can offset that in the future. We will not lose money during this process."
Don Fullerton, professor of finance who focuses on energy policy at the University of Illinois, said the deal could lead to future investments in wind farms.
"Even if they lose money now, they think the goodwill generated by being clean and sustainable can attract future customers and investors who care about such stuff," Fullerton said.
