The August 2003 blackout of the northeastern U.S. and CANADA caused great economic losses and inconvenience to New York City and other affected areas. The blackout was a warning to the rest of the world that the ability of conventional power systems to meet growing electricity demand is questionable. Failure of large power systems can lead to serious emergencies. Introduction of on-site generation, renewable energy such as solar and wind power and the effective utilization of exhaust heat is needed, to meet the growing energy demands of the residential and commercial sectors. Additional benefit can be achieved by integrating these distributed technologies into distributed energy resource (DER) systems. This work demonstrates a method for choosing and designing economically optimal DER systems. An additional purpose of this research is to establish a database of energy tariffs, DER technology cost and performance characteristics, and building energy consumption for Japan. This research builds on prior DER studies at the Ernest Orlando Lawrence Berkeley National Laboratory (LBNL) and with their associates in the Consortium for Electric Reliability Technology Solutions (CERTS) and operation, including the development of the microgrid concept, and the DER selection optimization program, the Distributed Energy Resources Customer Adoption Model (DER-CAM). DER-CAM is a tool designed to find the optimal combination of installed equipment and an idealized operating schedule to minimize a site's energy bills, given performance and cost data on available DER technologies, utility tariffs, and site electrical and thermal loads over a test period, usually an historic year. Since hourly electric and thermal energy data are rarely available, they are typically developed by building simulation for each of six end use loads used to model the building: electric-only loads, space heating, space cooling, refrigeration, water heating, and natural-gas-only loads. DER-CAM provides a global optimization, albeit idealized, that shows how the necessary useful energy loads can be provided for at minimum cost by selection and operation of on-site generation, heat recovery, cooling, and efficiency improvements.