Book excerpt: Sunshine may be abundant and free, but converting it into a usable form of energy is expensive. Investment decisions, funding of research and development, and commercial applications all rely on economic analysis. This book reviews the spectrum of economic methods that have been developed from the mid-1970s to the mid-1980s to analyze the feasibility of solar systems and shows how the use of these techniques has influenced federally sponsored research, development, and demonstration programs. There is a strong emphasis on the use of methods and modeling in studying policy alternatives. The book also reviews applications analysis, net energy analysis, and cost requirements for active and passive heating and cooling, for electric power generation, and for industrial process heat. The change in the costs of solar systems over time is one indication of program success, and the book includes a useful summary of the cost histories of various solar programs.