Qualifying Facility

A category of electric power producer established under the Public Utility Regulatory Policy Act (PURPA) of 1978, that includes small-power producers (SPP) who use renewable sources of energy such as biomass, geothermal, hydroelectricity, solar (thermal and photovoltaic), and wind, or cogenerators who produce both heat and electricity using any type of fuel. PURPA requires utilities to purchase electricity from these power producers at a rate approved by a state utility regulatory agency under Federal guidelines. PURPA also requires power providers to sell electricity to these producers. Some states have developed their own programs for SPPs and utilities.

A power production facility that qualifies for special treatment under the Public Utility Regulatory Policies Act. A qualifying facility must generate its power using cogeneration, biomass, waste, geothermal energy or renewable resources, such as solar and wind. PURPA prohibits utilities from owning majority interest in qualifying facilities.