diff --git a/homeassistant/config.py b/homeassistant/config.py
index 44bf542f7cd..2906f07a307 100644
--- a/homeassistant/config.py
+++ b/homeassistant/config.py
@@ -548,15 +548,15 @@ def _identify_config_schema(module):
     return '', schema
 
 
-def _recursive_merge(pack_name, comp_name, config, conf, package):
+def _recursive_merge(conf, package):
     """Merge package into conf, recursively."""
+    error = False
     for key, pack_conf in package.items():
         if isinstance(pack_conf, dict):
             if not pack_conf:
                 continue
             conf[key] = conf.get(key, OrderedDict())
-            _recursive_merge(pack_name, comp_name, config,
-                             conf=conf[key], package=pack_conf)
+            error = _recursive_merge(conf=conf[key], package=pack_conf)
 
         elif isinstance(pack_conf, list):
             if not pack_conf:
@@ -566,11 +566,10 @@ def _recursive_merge(pack_name, comp_name, config, conf, package):
 
         else:
             if conf.get(key) is not None:
-                _log_pkg_error(
-                    pack_name, comp_name, config,
-                    'has keys that are defined multiple times')
+                return key
             else:
                 conf[key] = pack_conf
+    return error
 
 
 def merge_packages_config(hass, config, packages,
@@ -605,39 +604,34 @@ def merge_packages_config(hass, config, packages,
                     config[comp_name].extend(cv.ensure_list(comp_conf))
                     continue
 
-                if merge_type == 'dict':
-                    if comp_conf is None:
-                        comp_conf = OrderedDict()
+            if comp_conf is None:
+                comp_conf = OrderedDict()
 
-                    if not isinstance(comp_conf, dict):
-                        _log_pkg_error(
-                            pack_name, comp_name, config,
-                            "cannot be merged. Expected a dict.")
-                        continue
-
-                    if comp_name not in config:
-                        config[comp_name] = OrderedDict()
-
-                    if not isinstance(config[comp_name], dict):
-                        _log_pkg_error(
-                            pack_name, comp_name, config,
-                            "cannot be merged. Dict expected in main config.")
-                        continue
-
-                    for key, val in comp_conf.items():
-                        if key in config[comp_name]:
-                            _log_pkg_error(pack_name, comp_name, config,
-                                           "duplicate key '{}'".format(key))
-                            continue
-                        config[comp_name][key] = val
-                    continue
-
-            # The last merge type are sections that require recursive merging
-            if comp_name in config:
-                _recursive_merge(pack_name, comp_name, config,
-                                 conf=config[comp_name], package=comp_conf)
+            if not isinstance(comp_conf, dict):
+                _log_pkg_error(
+                    pack_name, comp_name, config,
+                    "cannot be merged. Expected a dict.")
                 continue
-            config[comp_name] = comp_conf
+
+            if comp_name not in config or config[comp_name] is None:
+                config[comp_name] = OrderedDict()
+
+            if not isinstance(config[comp_name], dict):
+                _log_pkg_error(
+                    pack_name, comp_name, config,
+                    "cannot be merged. Dict expected in main config.")
+                continue
+            if not isinstance(comp_conf, dict):
+                _log_pkg_error(
+                    pack_name, comp_name, config,
+                    "cannot be merged. Dict expected in package.")
+                continue
+
+            error = _recursive_merge(conf=config[comp_name],
+                                     package=comp_conf)
+            if error:
+                _log_pkg_error(pack_name, comp_name, config,
+                               "has duplicate key '{}'".format(error))
 
     return config
 
diff --git a/tests/test_config.py b/tests/test_config.py
index d22d6b2acfd..717a3f62ec9 100644
--- a/tests/test_config.py
+++ b/tests/test_config.py
@@ -589,7 +589,7 @@ def test_merge(merge_log_err, hass):
     assert len(config['input_boolean']) == 2
     assert len(config['input_select']) == 1
     assert len(config['light']) == 3
-    assert config['wake_on_lan'] is None
+    assert isinstance(config['wake_on_lan'], OrderedDict)
 
 
 def test_merge_try_falsy(merge_log_err, hass):
@@ -656,6 +656,14 @@ def test_merge_type_mismatch(merge_log_err, hass):
 
 def test_merge_once_only_keys(merge_log_err, hass):
     """Test if we have a merge for a comp that may occur only once. Keys."""
+    packages = {'pack_2': {'api': None}}
+    config = {
+        config_util.CONF_CORE: {config_util.CONF_PACKAGES: packages},
+        'api': None,
+    }
+    config_util.merge_packages_config(hass, config, packages)
+    assert config['api'] == OrderedDict()
+
     packages = {'pack_2': {'api': {
         'key_3': 3,
     }}}
@@ -755,7 +763,7 @@ def test_merge_duplicate_keys(merge_log_err, hass):
     }
     config = {
         config_util.CONF_CORE: {config_util.CONF_PACKAGES: packages},
-        'input_select': {'ib1': None},
+        'input_select': {'ib1': 1},
     }
     config_util.merge_packages_config(hass, config, packages)