For a model deca-alanine peptide the cavity (ideal hydrophobic) contribution to hydration favors the helix state over extended states and the paired helix bundle in the assembly of two helices. The energetic contributions of attractive protein-solvent interactions are separated into quasi-chemical components consisting of a short-range part arising from interactions with solvent in the first hydration shell and the remaining long-range part that is well described by a Gaussian. In the helix-coil transition, short-range attractive protein-solvent interactions outweigh hydrophobic hydration and favor the extended coil states. Analysis of enthalpic effects shows that it is the favorable hydration of the peptide backbone that favors the unfolded state. Protein intramolecular interactions favor the helix state and are decisive in favoring folding. In the pairing of two helices, the cavity contribution outweighs the short-range attractive protein-water interactions. However, long-range, protein-solvent attractive interactions can either enhance or reverse this trend depending on the mutual orientation of the helices. In helix-helix assembly, change in enthalpy arising from change in attractive protein-solvent interactions favors disassembly. In helix pairing as well, favorable protein intramolecular interactions are found to be as important as hydration effects. Overall, hydrophilic protein-solvent interactions and protein intramolecular interactions are found to play a significant role in the thermodynamics of folding and assembly in the system studied.