The optical efficiency of a liquid-crystal light-valve projector is determined by the optical design, the method of modulation and the efficiency of the light source. A projector has been built with efficient optics. This projector has been tested with polarized and unpolarized light using rotation of polarization as a modulation technique and also with unpolarized light by using a diffraction grating formed in the liquid crystal. The diffraction technique uses a Schlieren optical system. The light sources tested have been xenon arcs, metal halide arcs and efficient solid-state lasers. The optical system reduces laser speckle significantly when laser sources are used. All combinations exceeded 3 lumens per watt when compared on a white light basis. Experimental results of the combinations will be given. Heating of the panel by absorption of visible light limits the minimum panel size that can be used for a given light output. Typical values will be presented for the choice of panel size for a given light output.