AGL has announced an abrupt departure from the residential rooftop solar installation business, continuing a rationalising of its “new energy” program over the last six months as it fights a furious battle with the federal government and conservatives over the closure of its Liddell coal generator.
The company announced late Tuesday that it would record a loss of $47 million from the write-down of goodwill, systems investments and inventory, plus other business closure costs.
This followed the decision to exit the company’s “proprietary residential solar” installation operations, which were largely based around the Rezeko solar business it bought seven years ago.
The announcement follows the closure of its “new energy” division in May, and the departure of that department head Elisabeth Brinton, and the sudden exit of CEO Andy Vesey three weeks ago, the same day as prime minister Malcolm Turnbull was toppled by the Liberal party and replaced with Scott “the hand of coal” Morrison.
AGL dismissed any link between the two events, saying that a review of the business began before the leadership changes.
“We decided to withdraw from the direct installation of residential solar hardware after completing a comprehensive review of the business,” AGL Chief Customer Officer Melissa Reynolds said in an emailed statement.
“The review determined that the interests of our customers would be better served by moving to a different business model. Under this model we forward enquiries for residential solar hardware installation to our third-party partners which are experts in the installation of PV solar.
“AGL will continue to provide advice to customers on solar energy and energy plans.”
AGL was one of the country’s top 10 installers of residential solar, and is in the top 5 of commercial solar installers. It will not exit that business, the company says. Its rival, Origin Energy, is by far the biggest installer of commercial solar in the country.
The company says its plans for virtual power plants in Adelaide and elsewhere will not be affected. The new energy division was merged into other business after a decision was made that “innovation should be something embedded in all business groups.”
AGL’s acting CEO is Brett Redman, the former head of energy markets. AGL has not significant any change of plans following the sudden, and as yet unexplained departure of Vesey.
Vesey had stared down attempts by the government to force the company to keep Liddell open, despite the company’s analysis that this would be significantly more expensive than renewables and storage options.
All eyes, however, will be on the annual general meeting to be held at the end of the month, with the new Morrison government threatening to force asset disposals if companies did not maintain “fair dinkum” power in the system.