A paddy drying system utilizing both solar energy and waste heat from an engine is described. A prototype dryer with a throughput of 10 t day-1 of paddy was designed, constructed, and evaluated at a rice mill in West Java, Indonesia. It was found that, in addition to the dryer providing increased drying capacity compared with sun drying, the solar-dried paddy provided both an increase in milling yield and rice of improved quality for which premium prices were paid. Fuel consumption of- the dryer was 29% less than that of a conventional flat-bed dryer. Financial analysis showed that the improvements in milling yield and rice quality more than compensated for the high fixed and variable costs of the dryer with a payback period of three years.