Solar radiation provides a huge amount of energy to the earth. The total amount of energy, which is irradiated from the sun to the earth's surface equals approximately 10 000 times the annual global energy consumption. On average, 1 700 kWh per square meter is insolated every year.

The light of the sun, which reaches the surface of the earth, consists mainly of two components: direct light and indirect or diffuse light, which is the light that has been scattered by dust and water particles in the atmosphere. Photovoltaic cells not only use the direct component of the light, but also produce electricity when the sky is overcast. So, it is a misconception that PV systems only operate in direct sunshine and are therefore not suitable for use in temperate climates. This is not correct: photovoltaics make use of diffuse solar radiation as well as direct sunlight. To determine the PV electricity generation potential for a particular site, it is important to assess the average total solar energy received over the year, rather than to refer to instantaneous irradiance.

Using photovoltaic cells, this radiation can be used to generate electricity. When sunlight strikes a photovoltaic cell, direct current (d.c.) is generated. By putting an electric load across the cell, this current can be collected. Not all of the light can be converted into electricity however. Photovoltaic cells use mainly visible light. A lot of the sun's energy is in IR- or warmth- and UV radiation, which explains why theoretical conversion efficiencies are as low as 20-30%. Practical deficiencies as impurities may decrease the performance of a photovoltaic cell even further.

The amount of useful electricity generated by a PV module is directly generated to the intensity of light energy, which falls onto the conversion area. So, the greater the available solar resource, the greater the electricity generation potential. The tropics, for instance, offer a better resource for generating electricity than is available at high latitudes. It also follows that a PV system will not generate electricity at night, and it is important that modules are not shaded. If electricity is required outside daylight hours, or if extended periods of bad weather are anticipated, some form of storage system is essential.

In order to capture as much solar energy as possible, the photovoltaic cell must be oriented towards the sun. If the photovoltaic cells have a fixed position, their orientation with respect to the south (northern hemisphere), and tilt angle, with respect to the horizontal plane, should be optimized. The optimum tilt angle lies within a range of approximately 15 degrees of the site latitude. For grid-connected PV systems in Western Europe, for instance, the optimum tilt angle is about 35 degrees. For regions nearer to the equator, this tilt angle will be smaller, for regions nearer to the poles it will be larger. A deviation of the tilt angle of 30 degrees from the optimum angle, will lead to less than 10% loss of the maximum yield.

PV modules are actually more efficient at lower temperatures, so to ensure that they do not overheat, it is essential that they are mounted in such a way as to allow air to move freely around them. This is a particularly important consideration in locations that are prone to extremely hot midday temperatures. The ideal PV generating conditions are cold, bright, sunny days.

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