Origin Energy reports fall in energy earnings, citing solar PV, warm winter & energy efficient homes as main causes

The growing impact of solar PV on incumbent utilities has again been highlighted, this time in the results of Australia’s biggest “gentailer” Origin Energy.

The company revealed in its half year report that earnings from its core energy markets business had fallen by the significant amount of 23 per cent – due to the combined impacts of a record warm winter, higher solar PV usage, and the growing number of energy efficient appliances.

The impact on household consumption was the greatest, with electricity demand down 12 per cent in its core mass market – that is a massive fall in a commodities business that has relied for decades on growing volumes.

Origin Energy broke down the individual impacts, with solar PV and energy efficiency accounting for eroding earnings by $55 million. The warm winter was blamed for $30 million. Gas margins is the only bright spot for the company, and caused a small rise in earnings. That is expected to grow as gas prices rises.

Origin Energy used to be one of the two top solar PV installers in the country, but it said its rate of installations had fallen dramatically since the removal of many government subsidies.

Still, Origin Energy wants a review of the tariffs, and indeed the renewable energy target that affect solar panels. Origin CEO Grant King still insists that solar and other distributed generation is “free riding” on the grid because such consumers are avoiding some network costs.

© 2014 Solar Choice Pty Ltd

Giles Parkinson

Giles Parkinson regularly contributes unique content to Solar Choice News. Giles is the founder and editor of clean energy industry news service RenewEconomy. He is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the founding editor of Climate Spectator.
Giles Parkinson