Photovoltaics is the direct conversion of sunlight into electricity using the physical mechanism called the photovoltaic effect.

There are a variety of ways to convert sunlight into useful energy. One method used for many centuries is to convert sunlight into heat, which can then be used for building heating or water heating. Two common examples of solar energy into heat are solar pool heating and solar water heaters. There are also two ways to convert sunlight into electricity. One is solar thermal electricity generation, which uses much of the technology from conventional utility electricity generation. In most utility electricity generation, heat is generated by burning a fuel such as coal or by a nuclear reaction, and this heat is turned into electricity. In solar thermal generating systems, the heat is created by focusing sunlight onto a spot rather than burning fuels, but the remainder of the electricity generation process is the same as conventional utility generation. Photovoltaics is another mechanisms for converting sunlight into electricity.

Photovoltaics, (also called solar electricity, solar batteries or solar cells) are fundamentally different in that they convert sunlight directly into electricity without intermediate steps.

Solar cells (or photovoltaic devices) directly convert light into electricity, and usually use similar physics and technology as that used by the microelectronics industry to make computer chips. The first step in the conversion of sunlight into electricity is that light must be absorbed in the solar cell. The absorbed light causes electrons in the material to increase in energy, at the same time making them free to move around in the material. However, the electrons remain at this higher energy for only a short time before returning to their original lower energy position. To collect the carriers before they lose the energy gained from the light, a pn junction is typically used. A pn junction consists of two different regions of a semiconductor material (usually silicon), with one side called the ptype region and the other the n-type region. In p-type material, electrons can grain energy when exposed to light but also readily return to their original low energy position. However, if they move into the n-type region, then they can no longer go back to their original low energy position and remain at a higher energy. The process of moving a light-generated carrier from where it was originally generated to the other side of the pn junction where it retains its higher energy is called collection. Once a light generated carrier is collected, it can be either extracted from the device to give a current, or it can remain in the device and gives rise to a voltage. The generation of a voltage due to the light generated carriers is called the photovoltaic effect. Typically, some of the light generated carries are used to give a current, while others are used to create a voltage. The combination of a current and voltage give rise to a power output from the solar cell. The electrons that leave the solar cell as current give up their energy to whatever is connected to the solar cell, and then re-enter the solar (in the n-type region) at their original low energy level. Once back in the solar cell, the process begins again: an electron absorbs light and gains energy, the electron is collected by the pn junction, it leaves the device to dissipate its energy in a load, and then re-enters the solar cell.

Solar cells are often characterized by the percentage of the incident power that they convert into power, called the power conversion efficiency or just efficiency. The efficiency is given by a percentage. The efficiency of a solar cell is determined by the material from which it is made and by the production technology used to make the solar cell. Efficiencies for commercially available solar cells range from about 5% to about 17%. The bulk of the commercial market consists of bulk silicon solar cells, and the research or laboratory efficiency of these is close to 25%. Space applications, where efficiency is more important, often use a different solar cell technology and may consist of solar cells made from different materials stacked on top of one another. The efficiency of these solar cells is up to 33%. The theoretical efficiency limit of solar energy conversion given completely idealized conditions and materials is 86%, but given present technology, solar cells that can potentially be made have a theoretical conversion efficiency closer to 50%. In addition to the power conversion efficiency, other methods to characterise solar cells also contain the word efficiency and are also given by a percentage. For example, the quantum efficiency measures, at a given wavelength of light, how much of the incident light is turned into current – not power. Quantum efficiency is a chiefly a method of analyzing devices used by specialists in the area and does not simply or directly relate its power conversion efficiency. For solar cells that have power conversion efficiencies of 15%, the quantum efficiencies may routinely reach over 90%. For newer or experimental solar cells, the quantum efficiency is often much lower, about 30%, and the power conversion efficiency is often less than 10%. The quantum efficiency and power conversion efficiency are sometimes confused in press or non-specialist articles, leading to apparent claims of very high solar cell efficiencies.

Solar cell technologies differ from one another based firstly on the material used to make the solar cell and secondly based on the processing technology used to fabricate the solar cells. The material used to make the solar cell determines the basic properties of the solar cell, including the typical range of efficiencies.

Most commercial solar cells for use in terrestrial applications (i.e., for use on earth) are made from wafers of silicon. Silicon wafer solar cells account for about 85% of the photovoltaic market. Silicon is a semiconductor used extensively to make computer chips. The silicon wafers can either consist of one large singe crystal, in which case they called single crystalline wafers, or can consist of multiple crystals in a singe wafer, in which case they are called multicrystalline silicon wafers. Single crystalline wafers will in general have a higher efficiency than multicrystalline wafers. Silicon wafers used in commercial production allow power conversion efficiencies of close to 20%, although the fabrication technologies at present limit them to about 17 to 18%. Multicrystalline silicon wafers allow power conversion efficiencies of up to 17%, with present fabrication achieving between 13 to 15%. The efficiency achieved by a solar cell depends on the processing technology used to make the solar cell. The most commonly used technology to make wafer-based silicon solar cells is screen-printed technology, which achieves efficiencies of 11-15%. Higher efficiency technologies are the buried contact or buried grid technology, which achieves efficiencies op up to 18% and has been in production for about a decade.

Although silicon solar cells are the dominant material, some applications – particularly space applications – require higher efficiency than is possible from silicon or other solar cell technologies. Solar cells made from GaAs or related materials (called III-V materials since they are ingeneral made from groups III and V of the periodic table) have a higher efficiency than silicon solar cells, particularly for the spectrum of light that exists in space. GaAs solar cells have efficiencies of up to 25% measured under terrestrial conditions. To further increase these efficiencies, solar cells made from different kinds of materials are stacked on top of one another. Such devices are called tandem or multijunction solar cells (the term multijunction applies to other types of structures as well). Such solar cells have efficiencies of up to 33% (under concentration, see below).

A final class of solar cell materials is called thin film solar cells. These solar cells can be made from a variety of materials, with the key characteristic being that the thickness of the devices is a fraction of other types of solar cells. Thin film solar cells may be made either from amorphous silicon, cadmium telluride, copper indium diselenide or thin layers of silicon. The efficiencies of thin film solar cells tend to be lower than those of other devices, but to compensate for this the production cost can also be significantly lower. Of these technologies, amorphous silicon is the best developed, and laboratory efficiencies are between 10 to 12%, with commercial efficiencies just over half these efficiencies. The other thin film technologies are still the subject of development, although commercial products exist. The efficiency of these devices is about 6% to 10% efficient.

Most solar cells will theoretically operate with a higher efficiency under intense sunlight than under the conditions encountered on earth. Concentrator solar systems exploit this effect, by focusing sunlight into a concentrated spot or line. Concentrator systems exist for both silicon and III-V solar cells. Silicon concentrator systems have reached efficiencies of 28% while III-V based systems have reached about 33%.

A solar cell is a single device. A photovoltaic or solar panel consists of multiple solar cells connected together into a single unit to protect the solar cells and increase the voltage and power above that of a single solar cell. Typically, you cannot buy solar cells, only photovoltaic panels. "Photovoltaic panel" and "photovoltaic array" are sometimes used interchangeably, but a photovoltaic array refers to all of the photovoltaic panels in particular systems that are connected together.

PV panels produce DC power, which stands for direct current. This is the same type of power as in a battery, but is diffe rent to that produced by the utility company, which is AC power. "AC" stands for "alternating current". DC power is converted into AC power via an inverter, which may be incorporated into some types of PV modules, such that these modules produce AC power.

A PV panel is rated in terms of the power it would produce under standard light intensity conditions called AM1.5 and at room temperature. For most locations, the standard light intensity rating is about the amount of light produced at noon in summer on a sunny day. (Locations close the equator or at higher altitudes may exceed this at certain times of the year, while locations far away from the equator will not reach this level). For climates at latitudes of about 30° above or below the equator, you can multiply the rating of the panel by 5 to get the amount of kWhr produced per day to get a rough estimate of the energy produced. For higher latitudes, multiply the rated power of the panel by about 3.

Detailed calculations and system designs are often calculated using computer programs, but rough estimates can be determined by a simple rule of thumb. The rule of thumb for locations around 30° above or below the equator is:

PV power needed = Total daily load in kWhr / 4

The total daily load in kWhr can be determined from either your utility bill (which will usually lists your daily energy consumption in kWhr), or by finding the power used by the appliance in kilowatts ( 1 kW = 1,000 Watts) and multiplying by the number of hours used. The power used by an appliance is often listed on either the box or somewhere on the appliance. An apartment will usually have a load of about 10 kWhr per day. Large variations from this number can be experienced in the daily load if the dwelling or the water heater uses electric heating. Heating loads are very energy intensive, and in a system using PV-generated electricity, such heating loads would be switched to solar (ie., not solar electric), gas or oil heating. For locations at higher latitudes, the load in the above equation should be divided by a lower number (3 is often a reasonable estimate), while locations closer to the equator or in high sunlight des ert regions can use higher numbers (5 to 6).

PV products are used in many different applications, covering a power range from 0.0001 Watts to 2,000,000 Watts. Traditionally, the most common application of PV has been for electrical loads that cannot be easily plugged into the electricity grid, either because they should be transportable – such as solar calculators, watches etc – or because the electricity grid does not exist at a particular location. When the grid is located far away from a particular application, PV is being used to provide "remote power". Examples of these applications are houses not connected to grid power, telecommunications, remote villages, water pumping and space. However, a recent and rapidly growing application for photovoltaics is for residential or building integrated which are connected to the electricity grid. During the day, power is used from photovoltaics, and at night power is used from the electricity grid. A final application is utility-scale photovoltaics, in which a utility company installs a large amount of photovoltaic power. These larger systems, which are far less common than other applications, are typically installed to achieve a specific technical goal.

Yes. The amount of time it takes for a technology to produce more energy than was used in their manufacture is called the energy payback time. Solar cells have an energy payback time ranging from a few months to 6 years, depending on the type of materials, the type of solar cell and where it is used. Solar cells have warranties well in excess of these numbers, typically 20 years. The origin of the popular myth that solar cells do not produce enough energy in their lifetime to recover the energy in making them is unknown, as every published study has shown that solar cells produce more energy in their lifetime than the energy used in production.

To buy a photovoltaic panel in small consumer quantities presently costs about $5/Watt. This number can vary widely depending on the amount of photovoltaic panels bought. Furthermore, installation and other component costs can up to double this number. An estimate for the installed price of a residential system is about $7/Watt, for a remote system up to $10/Watt. Although less common, a PV panel may also be priced in $/m². When priced in this way, it is difficult to compare to other panels priced in $/Watt, since the conversion factors depend on the panel efficiency, which is usually not given. It can however, be possibly determined by the power produced and the module area.