You need to make sure Excel has been shown once before you can call SetParent. Of course, it looks ugly, so you also need to hide Excel UI somehow from the end-user. For example:

    private void Window_Loaded(object sender, RoutedEventArgs e)
    {
        ...
        // get excel window
        var excelWnd = Microsoft.Win32.Interop.FindWindow("XLMAIN", null);

        // move excel somewhere outside the screen (of course you should compute it, not hardcode it)
        Microsoft.Win32.Interop.MoveWindow(excelWnd, -10000, -10000, 800, 600, true);

        // show it so it's initialized properly
        ExcelApplication.Visible = true;
        GenerateTestData(ExcelApplication);

        // now call SetParent
        Microsoft.Win32.Interop.SetParent(excelWnd, hwnd.Handle);

        // move it to parent
        Microsoft.Win32.Interop.MoveWindow(excelWnd, 10, 10, 800, 600, true);
    }