Current Development
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Photovoltaics is best known as a method for generating solar power by using solar cells packaged in photovoltaic modules, often electrically connected in multiples as solar photovoltaic arrays to convert energy from the sun into electricity. To explain the photovoltaic solar panel more simply, photons from sunlight knock electrons into a higher state of energy, creating electricity.

Photovoltaics can refer to the field of study relating to this technology, and the term photovoltaic denotes the unbiased operating mode of a photodiode in which current through the device is entirely due to the transduced light energy. Virtually all photovoltaic devices are some type of photodiode.

Solar cells produce direct current electricity from light, which can be used to power equipment or to recharge a battery. The first practical application of photovoltaics was to power orbiting satellites and other spacecraft and pocket calculators, but today the majority of photovoltaic modules are used for grid connected power generation. In this case an inverter is required to convert the DC to AC. There is a smaller market for off grid power for remote dwellings, roadside emergency telephones, remote sensing, and cathodic protection of pipelines.

Cells require protection from the environment and are packaged usually behind a glass sheet. When more power is required than a single cell can deliver, cells are electrically connected together to form photovoltaic modules, or solar panels. A single module is enough to power an emergency telephone, but for a house or a power plant the modules must be arranged in arrays. Although the selling price of modules is still too high to compete with grid electricity in most places, significant financial incentives in Japan and then Germany triggered a huge growth in demand, followed quickly by production. Although module prices rose and plateaued, it is expected that costs and prices will fall to 'grid parity' in many places around 2010.

Many corporations and institutions are currently developing ways to increase the practicality of solar power. While private companies conduct much of the research and development on solar energy, colleges and universities and institutes also work on solar-powered devices. Most research is being carried out in Germany, Japan, USA and Australia. Solar power has received less research funding than other sources, but is seen as the most likely largest source of electricity in 15 years in the United States.

The most important issue with solar panels is capital cost (installation and materials). Because of much increased demand, the price of silicon has risen and shortages occurred in 2005 and 2006. Newer alternatives to standard crystalline silicon modules including casting wafers instead of sawing , thin film (CdTe, CIGS, amorphous Si, microcrystalline Si), concentrator modules, 'Sliver' cells, and continuous printing processes. Due to economies of scale solar panels get less costly as people use and buy more as manufacturers increase production to meet demand, the cost and price is expected to drop in the years to come. As of early 2006, the average cost per installed watt for a residential sized system was about USD 6.50 to USD 7.50, including panels, inverters, mounts, and electrical items. In 2007 investors began offering free solar panel installation in return for a 25 year contract to purchase electricity at a fixed price, normally set at or below current electric rates.