This project evaluates what $/kW subsidy on microturbines (MT's) makes them economically competitive with natural gas internal combustion engines (ICE's). The Distributed Energy Resources Customer Adoption Model (DER-CAM) is used to determine least cost solutions, including distributed generation (DG) investment and operation, to sites' energy demands. The first site considered is a hospital in New York City. The small hospital (90 beds) has a peak electric load (including cooling) of 1200 kW, with heat loads comparable to electric loads. Consolidated Edison electricity and natural gas tariffs for 2003 are used. A 60% minimum DG system efficiency is imposed on DG operation to avoid the standby tariff, which is less amenable to DG than the parent tariff. The second site considered is the Naval Base Ventura County commissary in Southern California. The commissary has 13,000 m2 of floor space and contains a large retail store, supermarket, food court, and other small businesses. The site peak electric load (including cooling) is 1050 kW. Electricity and natural gas supply are from direct access contracts, and delivery service is provided by Southern California Edison and Southern California Gas, respectively. 2003 supply and delivery rates are used.