A systematic method to account for electron correlation in periodic systems which can predict quantitatively correct band structures of non-conducting solids from first principles is presented. Using localized Hartree-Fock orbitals (both occupied and virtual ones), an effective Hamiltonian is built up whose matrix elements can easily be transferred from finite to infinite systems. To describe the correlation effects wave-function-based multireference configuration interaction (MRCI) calculations with singly and doubly excited configurations are performed. This way it is possible to generate, both, valence and conduction bands with all correlation effects taken into account. trans-polyacetylene is chosen as a test system. (C) 2004 Elsevier B.V. All rights reserved.