In this talk, I will start from a general picture of light-matter interactions, such as quasiparticles and excitons, in solids and how to calculate them by first-principles approaches. Then I will focus on light-matter interactions of nanoscale materials, in which the reduced dimensionality substantially enhances many-electron interactions by orders of magnitude and results in unique excited-state properties, such as strongly polarized excitons and exciton liquids. By clarifying and calculating electron-electron, electron-hole, and electron-plasmon interactions, we can accurately explain many important measurements and provide new ideas to engineer light-matter interactions for exploring new science and realizing device and energy applications. Finally, beyond light-matter interactions, I will show how to combine different levels of first-principles tools and models to predict a wide range of electric and magnetic polarizations of solids and their applications.