The photovoltaic effect is closely related to the photoelectric effect. In either case, light is absorbed, causing excitation of an electron or other charge carrier to a higher-energy state. The main distinction is that the term photoelectric effect is now usually used when the electron is ejected out of the material (usually into a vacuum) and photovoltaic effect used when the excited charge carrier is still contained within the material. In either case, an electric potential (or voltage) is produced by the separation of charges, and the light has to have a sufficient energy to overcome the potential barrier for excitation. The physical essence of the difference is usually that photoelectric emission separates the charges by ballistic conduction and photovoltaic emission separates them by diffusion, but some "hot carrier" photovoltaic device concepts blur this distinction.
The first demonstration of the photovoltaic effect, by Edmond Becquerel in 1839, used an electrochemical cell. The first solar cell, consisting of a layer of selenium covered with a thin film of gold, was experimented by Charles Fritts in 1884, but it had a very poor efficiency. However, the most familiar form of the photovoltaic effect uses solid-state devices, mainly in photodiodes. When sunlight or other sufficiently energetic light is incident upon the photodiode, the electrons present in the valence band absorb energy and, being excited, jump to the conduction band and become free. These excited electrons diffuse, and some reach the rectifying junction (usually a diode p-n junction) where they are accelerated into the p-type semiconductor material by the built-in potential (Galvani potential). This generates an electromotive force and an electrical current, and thus some of the light energy is converted into electric energy. The photovoltaic effect can also occur when two photons are absorbed simultaneously in a process called two-photon photovoltaic effect.
The photovoltaic effect was first observed by French physicist A. E. Becquerel in 1839. He explained his discovery in Comptes rendus de l'Académie des sciences, "the production of an electric current when two plates of platinum or gold immersed in an acid, neutral, or alkaline solution are exposed in an uneven way to solar radiation."
Besides the direct excitation of free electrons, a photovoltaic effect can also arise simply due to the heating caused by absorption of the light. The heating leads to increased temperature of the semiconductor material, which is accompanied by temperature gradients. These thermal gradients in turn may generate a voltage through the Seebeck effect. Whether direct excitation or thermal effects dominate the photovoltaic effect will depend on many material parameters.
In most photovoltaic applications the radiation is sunlight, and the devices are called solar cells. In the case of a semiconductor p-n (diode) junction solar cell, illuminating the material creates an electric current because excited electrons and the remaining holes are swept in different directions by the built-in electric field of the depletion region.
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