The photovoltaic (PV) effect is the transferrence of light energy (sunlight energy received by the material) into electrical energy.

When the material is exposed to light, the light energy is absorbed by the metallic atoms in the material and excites the electrons, causing them to be freed and attracted by the positive electrode of the cell, thus creating an electric current.  Since most photovoltaic cells are energized by sunlight, they are commonly called solar cells.  There are photovoltaic cells suitable for indoor use, such as on calculators and other low-power devices.

Solar cells based on silicon (Si) semiconductors account for nearly 90 percent of PV products[1].  Currently, typical PV efficiencies are in the 16-18 percent range, although some cells have achieved greater than 40 percent in the lab.  Researchers are continuously working to develop new materials and methods to increase the conversion efficiency of PV cells to deliver more electrical energy from the same area. As PV cell efficiencies increase and PV cell production increases, the cost per watt of cell output will continue to decline, making solar PV more affordable for farmers, businesses and homeowners.

[1] Silicon Materials and Devices R&D - NREL