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Thermal generation of electron-hole pairs within a reverse-biased depletion region can supply a leakage electric current in addition to neutral-region diffusion. For a simple midgap trap with equal electron and hole lifetime parameters, its scale is $e\mathcal{A}W{n}_i/(2{\tau }_g)$, where $W$ is depletion width and ${\tau }_g$ the lifetime parameter. The electric field separates generated carriers. Unlike ideal diode minority-carrier diffusion current, this contribution scales approximately with $n_i$ rather than $n_i^2$ and can vary with reverse voltage through $W$. Consequently a measured activation energy need not equal the full band gap.

An electron-hole pair consists of an excited Electron and the unoccupied valence state described as an electron hole. Promoting a valence Electron across a semiconductor band gap creates such a pair without changing the total electric charge. The carriers can separate under an electric field, or undergo electron-hole recombination. A bound electron-hole pair is an exciton; an arbitrary unbound pair need not be an exciton.

A solar cell uses the photovoltaic effect to turn photon energy into electrical work. In a semiconductor, above-gap photon absorption generates an Electron in the conduction band and an electron hole in the valence band. A p-n junction, together with selective electrical contacts, collects the two carrier species at opposite terminals. Carrier diffusion and the built-in electric field help separate them before electron-hole recombination. Illumination maintains different quasi-Fermi levels for Electrons and electron holes; their splitting, divided by $e$, sets the available terminal voltage in an ideal device. The equilibrium built-in potential alone cannot continuously deliver work.

For an ideal junction, the illuminated output current density isHere $J_{\mathrm{sc}}$ is the photogenerated short-circuit current density and $J_0$ the diode saturation current. The useful operating point maximizes $VJ$, rather than either current or voltage separately. With solar-cell fill factor $\mathrm{FF}=P_{\max }/(V_{\mathrm{oc}}{I}_{\mathrm{sc}})$,Series resistance, shunts, incomplete photon absorption and nonradiative recombination reduce the attainable efficiency.

The Shockley-Queisser limit removes these avoidable losses but retains the following physical constraints. There is one semiconductor junction with one band gap; each absorbed above-gap photon yields at most one collected electron-hole pair; carriers thermalize to the cell temperature; and the inverse optical process produces unavoidable radiative recombination. If ${\Phi }_{\odot }(E)$ is the incident photon flux per unit energy, ideal photon absorption givesThe same ability to absorb light requires the junction to emit it. At a forward voltage $V$, the emitted photon population has a chemical potential $eV$; in the ordinary nondegenerate limit the resulting recombination current is the exponential diode term above. Maximizing $VJ$ with this radiative $J_0$, and then choosing $E_g$, gives the limiting efficiency.

A small band gap collects many photons but gives a low voltage and large thermalization losses. A large band gap permits a larger voltage but transmits too much of the incident spectrum. Below-gap photons are lost to transmission, excess photon energy above the gap becomes heat, and radiative emission and its associated entropy loss keep $e{V}_{\mathrm{oc}}$ below $E_g$. The optimum single-junction conversion is roughly thirty percent under ordinary unconcentrated sunlight; the precise ceiling depends on spectrum, cell temperature and optical geometry. The original detailed-balance calculation gave about $30\%$ at $E_g\simeq 1.1\mathrm{eV}$ under its specified assumptions.^[ref] Multiple junctions and optical concentration change the assumptions and consequently change the bound.