A basic rule of physics called the law of conservation of energy says that we can't magically create energy or make it vanish into thin air; all we can do is convert it from one form to another. That means a solar cell can't produce any more electrical energy than it receives each second as light. In practice, as we'll see shortly, most cells convert about 10–20 percent of the energy they receive into electricity. A typical, single-junction silicon solar cell has a theoretical maximum efficiency of about 30 percent, known as the Shockley-Queisser limit. That's essentially because sunlight contains a broad mixture of photons of different wavelengths and energies and any single-junction solar cell will be optimized to catch photons only within a certain frequency band, wasting the rest. Some of the photons striking a solar cell don't have enough energy to knock out electrons, so they're effectively wasted, while some have too much energy, and the excess is also wasted. The very best, cutting-edge laboratory cells can manage 46 percent efficiency in absolutely perfect conditions using multiple junctions to catch photons of different energies.

Real-world domestic solar panels might achieve an efficiency of about 15 percent, give a percentage point here or there, and that's unlikely to get much better. First-generation, single-junction solar cells aren't going to approach the 30 percent efficiency of the Shockley-Queisser limit, never mind the lab record of 46 percent. All kinds of pesky real-world factors will eat into the nominal efficiency, including the construction of the panels, how they are positioned and angled, whether they're ever in shadow, how clean you keep them, how hot they get (increasing temperatures tend to lower their efficiency), and whether they're ventilated (allowing air to circulate underneath) to keep them cool.

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