The use of solar energy, in most applications, is dependent primarily on economic considerations; solar energy can become an important energy source when the costs of its use become competitive with the costs of energy from other sources. The basic and usually most costly item of equipment for solar energy utilization is the collector, or solar heat exchanger, and the amortization of the first cost of this and associated equipment is the major cost of solar energy. In this paper, the probable economic feasibility of several solar applications is assessed by using the costs of energy from present sources as a basis for estimating upper limits on the first cost of solar heat exchangers and their associated equipment. For example, for space heating in temperate climates, heat exchanger costs would have to be in the range of $1–6 for solar heating to be competitive; this appears to be within an attainable range. Economic considerations have helped shape the development of the Wisconsin solar energy program, and studies of solar heat exchangers and their application to heating, cooling and power generation are briefly described.