"Whether on a solar-powered calculator or an international space station, solar panels generate electricity using the same principles of electronics as chemical batteries or standard electrical outlets. With solar panels, it's all about the free flow of electrons through a circuit.
To understand how solar panels generate electrical power, it might help to take a quick trip back to high school chemistry class. The basic element of solar panels is the same element that helped create the computer revolution -- pure silicon. When silicon is stripped of all impurities, it makes a ideal neutral platform for the transmission of electrons. Silicon also has some atomic-level properties which make it even more attractive for the creation of solar panels.Silicon atoms have room for eight electrons in their outer bands, but only carry four in their natural state. This means there is room for four more electrons. If one silicon atom contacts another silicon atom, each receives the other atom's four electrons. This creates a strong bond, but there is no positive or negative charge because the eight electrons satisfy the atoms' needs. Silicon atoms can combine for years to result in a large piece of pure silicon. This material is used to form the plates of solar panels.
Here's where science enters the picture. Two plates of pure silicon would not generate electricity in solar panels, because they have no positive or negative charge. Solar panels are created by combining silicon with other elements that do have positive or negative charges.
Phosphorus, for example, has five electrons to offer to other atoms. If silicon and phosphorus are combined chemically, the result is a stable eight electrons with an additional free electron along for the ride. It can\'t leave, because it is bonded to the other phosphorus atoms, but it isn\'t needed by the silicon. Therefore, this new silicon/phosphorus plate is considered to be negatively charged.
In order for electricity to flow, a positive charge must also be created. This is achieved in solar panels by combining silicon with an element such as boron, which only has three electrons to offer. A silicon/boron plate still has one spot left for another electron. This means the plate has a positive charge. The two plates are sandwiched together in solar panels, with conductive wires running between them.
With the two plates in place, it's now time to bring in the 'solar' aspect of solar panels. Natural sunlight sends out many different particles of energy, but the one we're most interested in is called a photon. A photon essentially acts like a moving hammer. When the negative plates of solar cells are pointed at a proper angle to the sun, photons bombard the silicon/phosphorus atoms.
Eventually, the 9th electron, which wants to be free anyway, is knocked off the outer ring. This electron doesn't remain free for long, since the positive silicon/boron plate draws it into the open spot on its own outer band. As the sun's photons break off more electrons, electricity is generated. The electricity generated by one solar cell is not very impressive, but when all of the conductive wires draw the free electrons away from the plates, there is enough electricity to power low amperage motors or other electronics. Whatever electrons are not used or lost to the air are returned to the negative plate and the entire process begins again.
One of the main problems with using solar panels is the small amount of electricity they generate compared to their size. A calculator might only require a single solar cell, but a solar-powered car would require several thousand. If the angle of the solar panels is changed even slightly, the efficiency can drop 50 percent.
Some power from solar panels can be stored in chemical batteries, but there usually isn't much excess power in the first place. The same sunlight that provides photons also provides more destructive ultraviolet and infrared waves, which eventually cause the panels to degrade physically. The panels must also be exposed to destructive weather elements, which can also seriously affect efficiency.
Many sources also refer to solar panels as photovoltaic cells, which references the importance of light (photos) in the generation of electrical voltage. The challenge for future scientists will be to create more efficient solar panels are small enough for practical applications and powerful enough to create excess energy for times when sunlight is not available."
This answer came from wisegeek.com