Distributed generation technologies offer electric utilities an alternative to large system capacity investments. This paper presents a simplified method to determine the value of deferring electric utility capacity investments using distributed generation. Consideration is given to both economic and technical factors, including uncertainty in the price of distributed generation. The technical evaluation is based on measured data from a 500 kW distributed generation PV plant in Kerman, California, Results indicate that the cost savings associated with deferring capacity investments can be accurately estimated using only seven economic parameters and one day＇s worth of distributed generation output and utility system data.