In this chapter we have introduced several tools and concepts that are important for evaluating the economic potential of new technologies. These include: the time value of money; cash flow diagrams; the net present value and internal rate of return of a project; the effect of taxes; the role of uncertainty and sensitivity analysis; the concept of financial leverage and its implications for the financial risk borne by borrowers and lenders; and economies of scale and learning curves. These concepts have been discussed with particular reference to solar thermal, windpower and photovoltaic technologies, but they are in fact very broadly applicable. The treatment is at an elementary level. Many textbooks on engineering economics are available for readers wishing to explore these ideas in more detail. ^[4]