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The efficiency of solar cells and solar panels is measured in terms of how much of the sun's energy is converted to electricity compared to how much is absorbed as heat (the way solar energy is absorbed by non-photoelectric materials).

The total amount of solar energy striking the Earth has been estimated as an average of 438 kilowatt-hours per square foot per year. The U.S. Department of Energy estimates the average household use of energy in the U.S. to be 8,900 kwh per year.

If a solar power system could convert one hundred percent of that power into electricity, and if that electricity could be stored with perfect efficiency, therefore, an average household's complete electricity use could be supplied by solar panels covering just slightly more than 20 square feet (or a 4-foot by 5-foot rectangle).

Obviously, 100% energy efficiency is impossible according to the laws of physics, so a larger array of solar panels would be required to cover a typical household's energy use. How much larger is a function of the energy efficiency of the system, and the largest part of that is the efficiency of the solar panels themselves.

Most Efficient Solar Panel Design

Not all solar cells are designed exactly the same way or use completely identical principles, although all of them convert solar radiation into electricity using the photoelectric effect. Single-crystal silicon wafers, the most common design on the market, have a theoretical efficiency limit of 37.7% and are approaching that limit; most solar cells of this type have efficiencies of at least 20%.

Multiple-layer solar cells have a theoretical limit of 86% efficiency (that is, they could in theory be made to convert 86% of sunlight into electricity, absorbing only 14% as heat). A recent experiment conducted in Australia involved using a combination of silicon, phosphorous, gallium, indium, and arsenic to harness light in the infrared portion of the spectrum as well as visible light. The experiment demonstrated an efficiency of 43%. However, this technology is not yet available on the market and there are a number of hurdles for it to get through.

Nanotechnology offers another approach that could increase solar panel efficiency, but this technology is even more experimental.

Most Efficient Solar Panels On The Market

The most efficient solar panels currently on the market appear to be those produced by Sun Power Corporation, whose top-line E20 series panels are tested at 22.4% efficiency. Bear in mind that most efficient is not the same as (and may in fact be opposite of) cheapest. These are the highest quality solar panels on the commercial market and, as one would expect, not the cheapest. Continued below....

Most Efficient Solar Panels

For purposes of constructing your own DIY solar power system for your home, it may come down to a question of which is more constrained, budget or space. A higher-efficiency panel means that less space would be required to generate the same amount of electricity.

Clearly, though, the technology of solar power will continue to improve, and it is very likely that some of today's commercially unavailable high-efficiency solar cells and solar panels will find their way to the market in the next ten years. The question may then have a completely different answer! As newer and, at present, experimental technologies usurp the "most efficient solar panel on the market" slot, the cost of today's front-runners will surely decline.

What's important to understand is that solar power, although it will continue to improve in the future, is avaiable enough and cheap enough at present that it is becoming increasingly attractive as an energy option -- especially given the rising costs of fossil fuels.