The economic impact of state ordered avoided cost rates for photovoltaic generated electricity

The Public Utility Regulatory Policies Act (PURPA) of 1978 requires that electric utilities purchase electricity generated by small power producers (QFs) such as photovoltaic systems at rates that will encourage the development of new energy technologies. The Federal Energy Regulatory Commission's regulations for PURPA require state regulatory authorities to ensure that utilities pay their full "avoided costs" to the QFs for the energy and capacity provided.