The growing popularity of homeowners generating electricity from the sun via photovoltaic panels has led Meridian Energy to consider cutting the rate it pays for home-generated electricity.
Unlike other power companies, the state-owned enterprise buys electricity from homeowners at the same rate it sells them electricity.
However, Meridian retail general manager Bill Highet said the "distributed generation" arrangement was likely to change in two or three months' time to save the power company "hundreds of thousands" of dollars.
Mr Highet said Meridian's losses from the arrangement were "not a big issue" when there was only a handful of people with photovoltaic panels on their roofs.
However, it now had 350 customers "exporting" electricity to it through the grid, was getting about 60 inquiries a week, and one or two connections were going in every day.
"We do need to have a different look at it."
Mr Highet described the current rate as "kind of generous".
"I'm sure we can still do something that's reasonably attractive for them [home generators] but not a loss-maker for us as it has been.
"If we don't address the issue, it will become a major problem for us and, while we are very keen to see the right thing done for the planet, we are a commercial business."
Mr Highet said Meridian had encouraged the installation of photovoltaic panels and believed there was scope for more.
"But we won't be quite as generous in the future as we have been."
Part of the solution will be to have the homeowner pay the lines charge rather than Meridian.
He suggested the new rates would have less effect on homeowners with "a little bit of surplus" to sell than on people setting up in the electricity-generating business.
"If they want to be a major generator, if they want to fill their back yard with arrays of panels, then we just want to make sure we are in a position to have a different discussion based more on what we pay for a wholesale deal ... "
Mr Highet said the wholesale price for electricity varied from 1-2c a unit to a spot price of hundreds of dollars - "not that we would necessarily do a deal like that for someone who is just producing a few kilowatts in their back yard".
Owner of Dunedin-based Power Options Ian Buchan is concerned about how a change in Meridian's rate might affect the take-up of alternative energy systems.
"There's a huge need for an incentive from the Government to get people started."
