State-owned power provider Synergy has recorded a massive $656.9 million net loss for the past financial year, blaming a "challenging energy landscape" and the rise of rooftop solar power for its woes.

Key points: Synergy's losses were far greater than the $180m forecast over three years

Synergy's losses were far greater than the $180m forecast over three years The utility says it is committed to renewables through wind and solar farms

The utility says it is committed to renewables through wind and solar farms The Government has promised there won't be massive power price rises as a result

Figures released in State Parliament three months ago forecast a dire future for the utility, but losses were not expected until the 2020–21 financial year and Thursday's results are much worse than previously expected.

In June a $180 million net loss over three years was forecast, beginning in 2020–21, and a small profit was expected as late as 2019–20.

Synergy continues to grapple with a flood of renewable energy undercutting its fleet of coal- and gas-fired power plants, and the widespread installation of rooftop solar panels was singled out for mention by chief executive officer Jason Waters in explaining the disastrous result.

The 2018–19 loss included a $428.9 million impairment on assets, which Synergy said was a result of increased fixed costs.

Synergy's net loss was far worse than expected. ( ABC News: Dean Faulkner )

These include generation operations, long-term power purchase agreements and increased regulated network charges.

Revenues were down 4.7 per cent, to $2.84 billion.

Solar uptake changes energy landscape

Mr Waters said the business continued to perform well year-on-year, despite the overall net loss which reflected the ongoing challenges confronting "an increasingly complex electricity supply environment".

"A number of factors have negatively impacted Synergy's financial performance, including increasing fixed costs, the rapid uptake of intermittent renewable energy, in particular rooftop solar PV, and milder than expected weather conditions affecting our baseload generation," Mr Waters said.

"The impairment can be attributed to changes in our generation operations, long-term power purchase agreements and regulated network charges that are no longer being offset by adequate levels of revenue available through the franchise, contestable and wholesale markets."

Synergy's fleet of coal- and gas-fired power plants have been hit by the spread of solar power. ( ABC News: Briana Shepherd )

Mr Waters highlighted Synergy's commitment to renewable energy through the Warradarge Wind Farm and the expansion of the Greenough River Solar Farm.

"Both of these projects will help us in achieving our large-scale renewable energy target obligations, maintain control of system security and reliability and create employment opportunities for the Mid West region of the state during the construction phases," he said.

The McGowan Government revealed in the latest state budget household power prices would rise by just 1.75 per cent in an effort to shield households from rising energy prices.

The increase was significantly lower than the 7 per cent jump projected in last year's budget.

But the decision widened the gap between the price Synergy receives for its electricity and the costs of producing it.

Dire results are no surprise

WA energy expert Ray Wills said Synergy's financial position was no surprise given the growth of solar.

"There is a whole load of kit [assets] that Synergy have said they will retire, that is an obvious one on the balance sheet," Professor Wills said.

"Primarily down to Collie [power station] and similar assets where they are closing down old coal-fired power stations and other old assets."

Energy expert Ray Wills says the uptake of renewable energies would continue to grow and cut into Synergy's profits. ( ABC News: Rhiannon Shine )

Professor Wills predicted the uptake of renewable energies and rooftop solar would continue to grow.

"I think we need to see full market reform and structural reform of the energy market," he said.

"Putting aside the asset loss, losing revenue is not sustainable for Synergy.

"But ironically, putting solar on rooftops is sustainable for everybody else."

He said the energy retailer would need to diversify to ensure its sustainability into the future, citing electric cars which would create new opportunities.

'Largest loss in history'

Opposition energy spokesman Dean Nalder said he was shocked when he saw Synergy's report.

"We believe this is the largest loss of a state-owned company in WA's history and that's really concerning," he said.

"What's of more concern, though, is that every Western Australian family will ultimately pay for this loss.

"And we're hearing very little from the Government to explain to Western Australians about what's going on in Synergy, why the size of this loss, and … what are the impairments that exist in there, and what this means for Western Australians.

"They need to explain to Western Australians about what the implications are and what the future is for Synergy, and they haven't come clean about that at all."

Power prices won't see rapid rise: Johnston

Energy Minister Bill Johnston said the loss was mainly due to a write-down in the valuation of the company's assets.

"The underlying cash loss for Synergy was $5.4 million, so on a cash basis the business is basically breaking even," he said.

Synergy had flagged a bad financial result. ( ABC News )

"Now one of the reasons they've reduced their valuation is because this Government is not going to allow the price of electricity to increase rapidly in the future.

"The former government left a planning assumption that there would be a 7 per cent increase in electricity prices and so Synergy were able to value their future electricity sales at that high price.

"We've made it clear by our decisions that we're not going to allow electricity prices to spiral out of control.

"That means the future income for Synergy is going to be less and that means their assets are valued at less."

Mr Johnston said the loss also included the write-down of a gas supply contract by $152 million.

"I make it clear, I didn't criticise the former government [for] entering into that contract at the time because it was a reasonable decision at that time."