IKEA upgrades Marsden Park DC with solar and battery, advancing sustainability and boosting zero-emissions deliveries.
IKEA’s Marsden Park Distribution Centre in Western Sydney has become a focal point in the company’s Australian sustainability roadmap, following an investment in solar and battery infrastructure.
Completed in 2017, the facility was IKEA’s first purpose-built distribution centre in the country, and its high, consistent energy demands made it a clear candidate for further energy efficiency initiatives.
The foundation for the project lies in IKEA’s long-standing global sustainability ethos. The company’s guiding vision to “create a better everyday life” is supported by a commitment to reducing its environmental footprint. In Australia, this took formal shape in 2014 with the start of IKEA’s renewable energy journey, including solar panel rollouts across its store network. As of early 2025, IKEA has installed more than 26,000 solar panels across nine of its ten Australian stores and distribution centre.
Why Marsden Park?
Marsden Park was prioritised as the next major upgrade site due to its around-the-clock operations and role as the logistical heart of IKEA’s Australian supply chain. Planning for the solar expansion began in 2023 with a feasibility study led by external consultants, resulting in a design-and-build partnership with Smart Commercial Solar.
The installation, completed in March 2025, included more than 4,000 solar panels across 9,000 square metres of roof space, designed to generate approximately 2,034 kW of power. This is expected to meet up to 70 per cent of the facility’s energy needs. A 1 MWh battery system was added in April 2025 to capture and store surplus energy for use during peak periods and overnight, supporting both warehouse operations and the site’s electric vehicle (EV) infrastructure.
Marsden Park forms part of a broader push across IKEA’s Australian footprint to boost renewable capacity. In 2024 alone, three new solar PV projects were initiated across two retail stores and one distribution centre, delivering a further 2.5 megawatts of capacity. The business has also achieved a 16 per cent improvement in building energy efficiency since FY16, reducing energy use by 22kWh per square metre through targeted upgrades.
IKEA says the Marsden Park system will reduce emissions by around 35 tonnes per year and is projected to deliver annual cost savings of approximately $260,000. The company has installed 24 EV chargers on site (28 vehicle charging capacity) for its delivery partners to power their electric delivery fleets. Currently (May 2025), 72 per cent of IKEA’s last-mile deliveries are completed using zero-emissions vehicles, and it expects to be 90 per cent electric by the end of 2025.
Nationally, 45 per cent of customer orders were delivered using zero-emissions vehicles in FY24. IKEA has committed $4.5 million to expanding a national charging infrastructure network to support its delivery partners, reinforcing its goal of 100 per cent zero emissions home deliveries.
Gorka Peral Hurtado, IKEA’s Construction Project Manager, says the long-term plan is to eventually power 100 per cent of the site through solar and battery storage, with room to scale battery capacity up to 3 or 4 MWh as prices fall and technology advances.
“Our energy usage is consistent across day and night, so storage is essential if we want to push beyond 70 per cent self-sufficiency,” Gorka explains. “The system has already been installed; we’re now just waiting on the DNSP (Distributed Network Service Provider) to grant final connection approval.”
Despite general success in delivering the project, Hurtado says some aspects of the process posed challenges, particularly around aligning construction timelines with network approvals. The battery installation was delayed due to development approval processes related to changes in carpark infrastructure, and approvals from the DNSP have been slower than anticipated.
The battery system is IKEA’s first of its kind in Australia, making Marsden Park a test case for future deployment across other sites. The company spent approximately $2 million on the electric vehicle charging infrastructure at the site, and $2.5 million on the solar and battery installation.
Renea Robson, IKEA’s Country Sustainability Manager, says the Marsden Park facility represents a clear step towards the company’s target of halving greenhouse gas emissions by 2030.
“This project plays a major role in that ambition and our broader sustainability agenda,” she says. “It’s also become a reference point within the business for what’s possible when sustainability is integrated from the outset.”
“It’s actually our most sustainable site in the country – our best-performing one to date.”
While the original construction of the Marsden Park facility pre-dates IKEA’s more recent build-to-sustainability standards, Renea confirms the site still performs at a high level operationally. The facility diverts 98 per cent of its waste from landfill and ranks as the company’s best-performing site in Australia on key sustainability metrics.
This performance is underpinned by a suite of supporting sustainability measures beyond the visible infrastructure.
Since the 2016 financial year, IKEA Australia has achieved an 89 per cent reduction in its operational climate footprint, all while growing revenue by 68 per cent. The company attributes this to its strategic alignment of environmental goals with long-term business planning, reinforcing that environmental responsibility can coexist with commercial growth.
In FY24, IKEA also reached 100 per cent renewable electricity use in its Australian retail operations. This was achieved through a combination of on-site solar generation and the purchase of large-scale renewable energy certificates, supporting the broader decarbonisation of the grid.
Beyond energy
Marsden Park also plays a role in IKEA’s circular product strategy. Through partnerships with organisations such as Good360, the company has been able to repurpose discontinued or excess inventory to those in need, diverting over 5.2 tonnes of material from landfill.
These measures, while less visible than the rooftop solar or battery infrastructure, contribute significantly to the overall performance of the site.
IKEA’s waste avoidance programs extend well beyond Marsden Park. In FY24, nearly one million products were diverted from landfill through product recovery and quality teams, while more than 35,000 second-hand items were resold via its Buy Back service. The company also reduced its food waste by 37 per cent since 2021, highlighting its commitment to circularity across operational areas.
Combined, they underscore IKEA’s efforts to future-proof its logistics operations while demonstrating what’s possible when sustainability is embedded across energy, waste, and product stewardship initiatives. In terms of design and delivery, Renea credits the success of the project to collaboration with technical experts.
“We partnered with Smart Commercial Solar to lead the project because we knew this wasn’t our core area of expertise. Working with the right specialists from the outset made a big difference.”
Looking ahead, IKEA plans to scale up solar capacity at additional sites, while exploring opportunities to expand storage and charging infrastructure in line with delivery fleet targets. While there are no additional distribution centres currently under construction in Australia, a new facility in New Zealand is being developed to high sustainability standards, including rooftop solar, water capture, and energy-efficient materials.
Renea says the response to the Marsden Park project has been broadly positive, with internal and external stakeholders citing it as a strong case study. “It’s also drawn attention to how many commercial rooftops in the area remain unused. We hope this project shows what’s possible and encourages others to follow.”
Both Smart Commercial Solar and IKEA’s engineering consultants have cited the project as a model deployment, and internal teams are monitoring its performance to inform future investment.