EPRI and two federal laboratories are supporting studies to evaluate the costs and benefits of distributed generation using a variety of technologies, including photovoltaics. Since the cost of PV-powered systems has not come down to make these larger (100s of kW’s to a few MW’s) facilities economic, researchers are examining the value of these facilities when strategically placed in a utility’s distribution system. Not only the conventional capacity and energy benefits but also other unique benefits including: 1) reduced losses on the T&D system; 2) environmental benefits from photovoltaic-produced energy; and 3) benefits of delaying installation or upgrading of T&D facilities are being evaluated. A wide variety of benefits have been identified and are being quantified in these studies; these benefits vary, depending upon where the PV system is connected: the distribution primary feeder, transformer bank, or subtransmission system. Early results indicate the sum of these conventional and unique benefits can bring the value of the PV system up to a value much closer to the cost of the PV system. As part of the PVUSA project, a 500-kW demonstration project is now under construction in central California to measure these projected performance, cost, operating and reliability benefits. Initial operation of the Kerman Project, as it is known, is scheduled for June 1993.