There are  many factors  that  limit the efficiency of solar panels  .

The first unbreakable upper  bound is the thermodynamic efficiency limit , which is about 86  %

This  comes from  the fact  that  every  time  you transfer energy from one source to another  ( such as photons into electricity )  you lose some in the process .

The second breakable limit  is called  the Shockley-Queisser limit , and it is about  30 % .

I’m going to assume  you  don’t know  physics  at  all,  and I’m going to try  to keep it  simple .

Solar  panels are made  of  semiconductors   ( silicon, perovskite , and gallium arsenide ). All of these materials have some  ” allowed ”  energies for the electrons inside .

You can  imagine  it  as a cinema . There is  a set  of  seats,  and each seat can  accommodate  exactly one electron . In general, electrons like to occupy seats in order  ( ie from the lowest allowed energy level to the highest allowed energy level ) .

Why are solar panels low efficiency?

The crucial  property of a  semiconductor  is  that  there is a  ”  gap ”  between  occupied and unoccupied seats  . In order to excite an electron, it must be given enough energy to occupy a higher energy seat . when this happens ,

The charge can be collected and  used effectively .

The problem  is :  the electron cannot  be  given  an energy lower than the gap, which simply will not  be absorbed.

The light  from  the  sun  comes in different frequencies ,  just like the colors you know . It goes from infrared  ( low energy )  to red , green, blue , violet and ultraviolet  ( high energy ).

The frequency range  is called the solar spectrum, which has a peak around green, and decays into lower and higher frequencies .

Shockley  Kuizer says :  If you use only one cell , you can harvest no more than   30 % of the incoming energy . The reason is that not all photons are useful to us .

Because of the  above reasons  , you would need a photon with energy equal to or higher than the energy of the gap, so all photons with lower energy are wasted .

And there’s  more :  Of  all  the  photons  with  energy higher  than the energy  gap  ,  only an amount equal to the energy gap will be used  .

A creative example could be  like this :  In order to get to the higher seats , an electron (  you ) must  pay a fee .

The photon  will give you some  money,  but the  toll machine  doesn’t give any change, and requires at least $ 1 . Thus, if the photon gives you less than $  1  , you ca n’t pass .

If  it gives you $   1  , $   5  , or $   10  , it doesn’t  matter,  because  you ‘ll have to  pay fees to get to the higher seats  ( no matter how much you pay !)  and the energy you ‘ll get is the same .

Silicon  has an energy gap  of 1.2  electron  volts  ( approximately )  which is just below red .

Most of  the infrared radiation  will be wasted , and  most of the visible and ultraviolet light will not  be  used  at maximum efficiency .

How  can  this limit be broken  ?

You  will need to  stack  different semiconductors   ( see picture ) , with different energy gaps .  But this is not a simple matter at all, although progress has been made in this field  . Satellites already  use solar panels with up to  50 % efficiency , but they are so expensive that they are useless for commercial applications .

My own opinion  ( which  of course is  quite subjective  )  is that as more investments and interests are put into the search for efficient solar panels , it is only a matter of time until we achieve a commercial version of a panel with efficiencies of up to  40-50 % .

And  the higher efficiency would probably be  something we would only use on high – tech things like spaceships or satellites .

Last  but not  least,  let  me  point  out  one thing  . When it comes to efficiency in energy conversion, you should always think in terms of the original source of that energy.

For  example  :  suppose a coal- fired power plant has an efficiency of  70 % . What does that mean ?

This  means  that  70 %  of  the energy  contained  within  coal  will be converted  into  electricity . But  coal  is originally  made by plants  that  used solar energy at one time, with  less efficiency  .

So  if  you compare  the energy  you  get  in the end with the energy coming  from the sun, it ‘s probably less than  1 % .

From  this  perspective, we  can say that  solar panels  are incredibly efficient !