The photovoltaic effect in solar cells converts light into electric current. The first solar cell was constructed by Charles Fritts in the 1880s.^[20] The German industrialist Ernst Werner von Siemens was among those who recognized the importance of this discovery.^[21] In 1931, the German engineer Bruno Lange developed a photo cell using silver selenide in place of copper oxide,^[22] although the prototype selenium cells converted less than 1% of incident light into electricity. Following the work of Russell Ohl in the 1940s, researchers Gerald Pearson, Calvin Fuller and Daryl Chapin created the silicon solar cell in 1954.^[23] These early solar cells cost US$286/watt and reached efficiencies of 4.5–6%.^[24] In 1957, Mohamed M. Atalla developed the process of silicon surface passivation by thermal oxidation at Bell Labs.^[25][26] The surface passivation process has since been critical to solar cell efficiency.^[27]

As of 2022 over 90% of the market is crystalline silicon.^[28] Other types of solar cell include thin-film solar cells, made by depositing one or more thin layers, or thin film (TF) of photovoltaic material on a substrate, such as glass, plastic or metal.

The array of a photovoltaic system, or PV system, produces direct current (DC) power which fluctuates with the sunlight’s intensity. For practical use this usually requires conversion to alternating current (AC), through the use of inverters.^[19] Multiple solar cells are connected inside panels. Panels are wired together to form arrays, then tied to an inverter, which produces power at the desired voltage, and for AC, the desired frequency/phase.^[19]

Many residential PV systems are connected to the grid when available, especially in developed countries with large markets.^[29] In these grid-connected PV systems energy storage is optional. In certain applications such as satellites, lighthouses, or in developing countries, batteries or additional power generators are often added as back-ups. Such stand-alone power systems permit operations at night and at other times of limited sunlight.

Concentrated solar power (CSP), also called “concentrated solar thermal”, uses lenses or mirrors and tracking systems to concentrate sunlight, then uses the resulting heat to generate electricity from conventional steam-driven turbines.^[30]

As of 2021 the levelized cost of electricity from CSP is over twice that of PV.^[31] As of 2022, less than 1% of solar power comes from CSP.

A hybrid system combines solar with energy storage or one or more other forms of generation. Hydro,^[32][33] wind^[34][35] and batteries^[36] are commonly combined with solar. The combined generation may enable the system to vary power output with demand, or at least smooth the solar power fluctuation.^[37][38] There is much hydro worldwide, and adding solar panels on or around existing hydro reservoirs is particularly useful, because hydro is usually more flexible than wind and cheaper at scale than batteries,^[39] and existing power lines can sometimes be used.^[40][41]

The early development of solar technologies starting in the 1860s was driven by an expectation that coal would soon become scarce, such as experiments by Augustin Mouchot.^[42] Charles Fritts installed the world’s first rooftop photovoltaic solar array, using 1%-efficient selenium cells, on a New York City roof in 1884.^[43] However, development of solar technologies stagnated in the early 20th century in the face of the increasing availability, economy, and utility of coal and petroleum.^[44] Bell Telephone Laboratories’ 1950s research used silicon wafers with a thin coating of boron. The “Bell Solar Battery” was described as 6% efficient, with a square yard of the panels generating 50 watts.^[45] The first satellite with solar panels was launched in 1957.^[46]

By the 1970s, solar panels were still too expensive for much other than satellites.^[47] In 1974 it was estimated that only six private homes in all of North America were entirely heated or cooled by functional solar power systems.^[48] However, the 1973 oil embargo and 1979 energy crisis caused a reorganization of energy policies around the world and brought renewed attention to developing solar technologies.^[49][50]

Deployment strategies focused on incentive programs such as the Federal Photovoltaic Utilization Program in the US and the Sunshine Program in Japan. Other efforts included the formation of research facilities in the United States (SERI, now NREL), Japan (NEDO), and Germany (Fraunhofer ISE).^[51] Between 1970 and 1983 installations of photovoltaic systems grew rapidly. In the United States, President Jimmy Carter set a target of producing 20% of U.S. energy from solar by the year 2000, but his successor, Ronald Reagan, removed the funding for research into renewables.^[47] Falling oil prices in the early 1980s moderated the growth of photovoltaics from 1984 to 1996.

In the mid-1990s development of both residential and commercial rooftop solar, as well as utility-scale photovoltaic power stations, began to accelerate again due to supply issues with oil and natural gas, global warming concerns, and the improving economics of PV relative to other energy technologies.^[47][55] In the early 2000s, the adoption of feed-in tariffs—a policy mechanism that gives renewables priority on the grid and defines a fixed price for the generated electricity—led to a high level of investment security and to a soaring number of PV deployments in Europe.

For several years, worldwide growth of solar PV was driven by European deployment, but it then shifted to Asia, especially China and Japan, and to a growing number of countries and regions all over the world. Chinese manufacturers of solar equipment grew to be the largest.^[56][57] Although concentrated solar power capacity grew more than tenfold, it remained a tiny proportion of the total,^[58]: 51 because the cost of utility-scale solar PV fell by 85% between 2010 and 2020, while CSP costs only fell 68% in the same timeframe.^[59]

Solar and wind power are scaling up faster than previous sources of electricity. Declining costs, modular design, and improved battery storage help the transition to renewable energy.^[60]

 

In 2025, growth in solar, wind and other low-carbon electric power exceeded the overall growth in demand for electricity, reducing reliance on fossil fuels and helping to curb greenhouse gas emissions.^[61]

 

Despite the rising cost of materials, such as polysilicon, during the 2021–2022 global energy crisis,^[62] utility scale solar was still the least expensive energy source in many countries due to the rising costs of other energy sources, such as natural gas.^[63] In 2022, global solar generation capacity exceeded 1 TW for the first time.^[64] However, fossil-fuel subsidies have slowed the growth of solar generation capacity.^[65] Africa is the world’s fastest growing solar power market, aided mostly by China.^[66]

Current status

See also: Solar cell research

About half of installed capacity is utility scale.^[67]

Forecasts

Solar is forecast to become the largest source of renewable power before the end of the 2020s, exceeding the output of hydropower.^[68] Utility scale is forecast to become the largest source of electricity in all regions except sub-Saharan Africa by 2050.^[67]

Commercial concentrating solar power (CSP) plants, also called “solar thermal power stations”, were first developed in the 1980s. The 377 MW Ivanpah Solar Power Facility, located in California’s Mojave Desert, is the world’s largest solar thermal power plant project. Other large CSP plants include the Solnova Solar Power Station (150 MW), the Andasol solar power station (150 MW), and Extresol Solar Power Station (150 MW), all in Spain. The principal advantage of CSP is the ability to efficiently add thermal storage, allowing the dispatching of electricity over up to a 24-hour period. Since peak electricity demand typically occurs at about 5 pm, many CSP power plants use 3 to 5 hours of thermal storage.^[72]

In many countries, solar power is the lowest cost source of electricity.^[73] The typical cost factors for solar power include the costs of the modules, the frame to hold them, wiring, inverters, labour cost, any land that might be required, the grid connection, maintenance and the solar insolation that location will receive.

Photovoltaic systems use no fuel, and modules typically last 25 to 40 years.^[74] Thus upfront capital and financing costs make up 80% to 90% of the cost of solar power,^[75]: 165 which is a problem for countries where contracts may not be honoured, such as some African countries.^[4] Some countries are considering price caps,^[76] whereas others prefer contracts for difference.^[77]

Expenses of high-power band solar modules has greatly decreased over time. Beginning in 1982, the cost per kW was approximately 27,000 American dollars, and in 2006 the cost dropped to approximately 4,000 American dollars per kW. The PV system in 1992 cost approximately 16,000 American dollars per kW and it dropped to approximately 6,000 American dollars per kW in 2008.^[78] In 2025 in the US, residential solar costs around 2.50 dollars/watt^[79] (but solar shingles cost much more).^[80] As of 2025 utility solar costs are around 25 UScent/watt.^[81]

The productivity of solar power in a region depends on solar irradiance, which varies through the day and year and is influenced by latitude and climate. PV system output power also depends on ambient temperature, wind speed, solar spectrum, the local soiling conditions, and other factors.

Onshore wind power tends to be the cheapest source of electricity in Northern Eurasia, Canada, some parts of the United States, and Patagonia in Argentina whereas in other parts of the world mostly solar power (or less often a combination of wind, solar and other low carbon energy) is thought to be best.^[82]: 8 Modelling by Exeter University suggests that by 2030, solar will be least expensive everywhere except in some nordic countries.^[83]

The locations with highest annual solar irradiance lie in the arid tropics and subtropics. Deserts lying in low latitudes usually have few clouds and can receive sunshine for more than ten hours a day.^[84][85] These hot deserts form the Global Sun Belt circling the world. This belt consists of extensive swathes of land in Northern Africa, Southern Africa, Southwest Asia, Middle East, and Australia, as well as the much smaller deserts of North and South America.^[86]

Thus solar is (or is predicted to become) the cheapest source of energy in all of Central America, Africa, the Middle East, India, South-east Asia, Australia, and several other regions.^[82]: 8

Different measurements of solar irradiance (direct normal irradiance, global horizontal irradiance) are mapped below:

• 
  North America

• 
  South America

• 
  Europe

• 
  Africa and Middle East

• 
  South and South-East Asia

• 
  Australia

• 
  World
•  

In cases of self-consumption of solar energy, the payback time is calculated based on how much electricity is not purchased from the grid.^[87] However, in many cases, the patterns of generation and consumption do not coincide, and some or all of the energy is fed back into the grid. The electricity is sold, and at other times when energy is taken from the grid, electricity is bought. The relative costs and prices obtained affect the economics. In many markets, the price paid for sold PV electricity is significantly lower than the price of bought electricity, which incentivizes self-consumption.^[88] Moreover, separate self-consumption incentives have been used in e.g., Germany and Italy.^[88] Grid interaction regulation has also included limitations of grid feed-in in some regions in Germany with high amounts of installed PV capacity.^[88][89] By increasing self-consumption, the grid feed-in can be limited without curtailment, which wastes electricity.^[90]

A good match between generation and consumption is key for high self-consumption. The match can be improved with batteries or controllable electricity consumption.^[90] However, batteries are expensive, and profitability may require the provision of other services from them besides self-consumption increase,^[91] for example avoiding power outages.^[92] Hot water storage tanks with electric heating with heat pumps or resistance heaters can provide low-cost storage for self-consumption of solar power.^[90] Shiftable loads, such as dishwashers, tumble dryers and washing machines, can provide controllable consumption with only a limited effect on the users, but their effect on self-consumption of solar power may be limited.^[90]

The original political purpose of incentive policies for PV was to facilitate an initial small-scale deployment to begin to grow the industry, even where the cost of PV was significantly above grid parity, to allow the industry to achieve the economies of scale necessary to reach grid parity. Since reaching grid parity, some policies are implemented to promote national energy independence,^[93] high tech job creation^[94] and reduction of CO₂ emissions.^[93]

Community solar

A community solar project is a solar power installation that accepts capital from and provides output credit and tax benefits to multiple customers, including individuals, businesses, nonprofits, and other investors. Participants typically invest in or subscribe to a certain kW capacity or kWh generation of remote electrical production.^[97]

The overwhelming majority of electricity produced worldwide is used immediately because traditional generators can adapt to demand and storage is generally more expensive. Both solar power and wind power are sources of variable renewable power, meaning that all available output must be used locally, transmitted elsewhere to be used, or stored (e.g., in a battery). Since solar energy is not available at night, storing it so as to have continuous electricity availability is potentially an important issue, particularly in off-grid applications and for future 100% renewable energy scenarios.^[103] As solar power is intermittent and depends on both daylight and weather conditions, countries following net-zero pathways that rely heavily on solar energy typically need to integrate it with large-scale battery storage, pumped hydroelectric energy storage, or long-distance power transmission to help maintain grid reliability.^{[104][105][106][107]}

Solar power can be forecast to some extent by time based on the time of day, location, and seasons, although short-term generation also depends on weather conditions. The challenge of integrating solar power in any given electric utility varies significantly. In regions with hot summers and mild winters, solar tends to be well matched to daytime cooling demands.^[106]

Concentrated solar power plants may use thermal storage to store solar energy, such as in high-temperature molten salts. These salts are an effective storage medium because they are low-cost, have a high specific heat capacity, and can deliver heat at temperatures compatible with conventional power systems.^[108]

In stand alone PV systems, batteries are traditionally used to store excess electricity. With grid-connected photovoltaic power systems, excess electricity can be sent to the electrical grid. Net metering and feed-in tariff programs give these systems a credit for the electricity they produce. This credit offsets electricity provided from the grid when the system cannot meet demand, effectively trading with the grid instead of storing excess electricity.^[109] When wind and solar are a small fraction of the grid power, other generation techniques can adjust their output appropriately, but as these forms of variable power grow, additional balance on the grid is needed. As prices are rapidly declining, PV systems increasingly use rechargeable batteries to store a surplus to be used later at night. Batteries used for grid-storage stabilize electrical grids by leveling out peak loads for several hours.^[110]

Most home batteries are lithium-ion, mostly in the form of lithium iron phosphate batteries (especially since around 2021), but also some nickel manganese cobalt batteries.^[111] Lithium-ion batteries have the potential to replace lead-acid batteries in the near future, as they are being intensively developed and lower prices are expected due to economies of scale provided by large production facilities such as the Tesla Gigafactory 1.^{[citation needed]} In addition, the Li-ion batteries of plug-in electric cars may serve as future storage devices in a vehicle-to-grid system.^[112] Since most vehicles are parked an average of 95% of the time, their batteries could be used to let electricity flow from the car to the power lines and back.^[113]

Retired electric vehicle (EV) batteries can be repurposed.^[114] Other rechargeable batteries used for distributed PV systems include, sodium–sulfur and vanadium redox batteries, two prominent types of a molten salt and a flow battery, respectively.^{[115][116][117]}

The need for adequate storage has become increasingly critical as solar generation scales up. In Europe, insufficient storage and transmission capacity could result in approximately 40 terawatt-hours of solar electricity being wasted through curtailment in 2026, equivalent to powering Greater London for a year — a 25% increase compared to 2025^[118].

Solar power plants, while they can be curtailed, usually simply output as much power as possible. Therefore in an electricity system without sufficient grid energy storage, generation from other sources (coal, biomass, natural gas, nuclear, hydroelectricity) generally go up and down in reaction to the rise and fall of solar electricity and variations in demand (see load following power plant).

Conventional hydroelectric dams work very well in conjunction with solar power; water can be held back or released from a reservoir as required. Where suitable geography is not available, pumped-storage hydroelectricity can use solar power to pump water to a high reservoir on sunny days, then the energy is recovered at night and in bad weather by releasing water via a hydroelectric plant to a low reservoir where the cycle can begin again.^[120]

While hydroelectric and natural gas plants can quickly respond to changes in load; coal, biomass and nuclear plants usually take considerable time to respond to load and can only be scheduled to follow the predictable variation. Depending on local circumstances, beyond about 20–40% of total generation, grid-connected intermittent sources like solar tend to require investment in some combination of grid interconnections, energy storage or demand side management. In countries with high solar generation, such as Australia, electricity prices may become negative in the middle of the day when solar generation is high, thus incentivizing new battery storage.^[121][122]

The combination of wind and solar PV has the advantage that the two sources complement each other because the peak operating times for each system occur at different times of the day and year.^[123] The power generation of such solar hybrid power systems is therefore more constant and fluctuates less than each of the two component subsystems.^[124] Solar power is seasonal, particularly in northern/southern climates, away from the equator, suggesting a need for long term seasonal storage in a medium such as hydrogen or pumped hydroelectric.^[125]