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New Zealand state-owned electricity generator and retailer Meridian Energy Ltd. said Thursday that it has bought a small U.S.-based solar power facility, giving it a toehold in the U.S. renewable energy market and allowing it to explore the potential of solar power for New Zealand.

"Hydro has formed the backbone of our electricity supply for the best part of a century, and we are now seeing wind taking an ever-increasing role," said Chief Executive Tim Lusk in a statement. "It is a natural progression from there to start looking seriously at how this country can harness its solar power resources."

Meridian's US$5.4 million purchase of Cleantech America includes a five-megawatt photovoltaic solar facility in Mendota, California which is ready to move into construction and will be commissioned in December, the company said.

Output from the facility, known as CalRENEW-1, will be sold to Pacific Gas & Electricity Co. under a long-term power purchase agreement. The San Francisco-based company is a unit of PG&E Corp. (PCG).

Lusk said Meridian is already exploring solar opportunities in the Pacific Islands, where power systems are dominated by expensive diesel generation.

"The experience we gain from this involvement in the U.S. will assist enormously with the options we are exploring in the Pacific and Australia, and ultimately of course we will be bringing the technology to the New Zealand market," Lusk said.

The purchase also has the added benefit of "providing Meridian a toehold" from which it will seek opportunities to invest in renewable energy projects in the U.S., he said.

Meridian is New Zealand's largest state-owned electricity generator, accounting for about 30% of the country's total electricity generation. It operates hydro and wind generation projects that supply around 200,000 residential and business customers in New Zealand.

-By Rebecca Howard, Dow Jones Newswires; 64-4-471-5990; rebecca.howard@dowjones.com