This interim report reviews the major incentive policy options available to accelerate market penetration of solar heating and cooling (SHAC) systems. Feasible policy options designed to overcome existing barriers to commercial acceptance and market penetration are identified and evaluated. The report is divided into seven sections, each dealing with a key problem relating to the widespread use of SHAC systems: (1) economic and financial incentives; (2) solar energy/public utility interface; (3) legal and regulatory issues; (4) Energy Research and Development Administration (ERDA) patent policy; (5) building codes, standards, and warranties; (6) marketing, manpower, consumer, and environmental issues; and (7) regional aspects of the incentives program. Within each of these areas the important potential barriers to the commercialization of SHAC systems are identified, assessed, and evaluated. The most effective incentive options are evaluated and in a detailed, comprehensive appendix, each of these incentive options is analyzed in depth, and numerous other potential incentives are also discussed. Listings of state solar energy legislation enacted or proposed as of January 1977 are given in the appendix. (Author/MLF)