The issues of energy resource conservation, reduction of adverse environmental impact, and improved cost effectiveness of energy systems over their entire operating lifetimes have stimulated renewed interest in the concept of total energy. As is well known, a total energy system is one which serves both electrical and thermal needs of a development from a single on-site source. In this way, otherwise wasted heat can be captured for heating, (absorption) cooling, and domestic hot water supply.

Even though total energy systems have potentially valuable resource conservation and environmental impact characteristics, they must also be justified on the basis of economics. In most cases, residential project developers do not consider total energy as an alternative because the technical complexities of economic evaluation are considered a serious obstacle.

Recognizing this situation, the Office of Policy Development and Research of the U.S. Department of Housing and Urban Development in December 1971 called for an analysis of the "Economic Evaluation of Total Energy" with the overall objective being "preparation of guide criteria for. the determination~ by the private and public sectors of the economy, the applicability of Total Energy systems for residential development."

It should be emphasized that the purpose of the study was not to replace project-specific feasibility studies, but rather to identify those situations in which a full technical and economic study is justified