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Absorbed photons with energy at least the band gap generate electron–hole pairs. The built-in field of the p-n junction separates carriers generated in or reaching the depletion region; minority carriers generated nearby can diffuse into that collection region. Selective contacts carry electrons and holes into an external circuit before they recombine.

Define positive electric current into the positive-voltage terminal. In the ideal illuminated-diode model,The dark curve has $I_{\mathrm{ph}}=0$; illumination shifts it downward. At short circuit $I\simeq -I_{\mathrm{ph}}$; at open circuit $I=0$ and $V=V_{\mathrm{oc}}$. Between them the illuminated cell lies in quadrant IV and supplies power $P_{\mathrm{out}}=-VI>0$. The maximum power point maximizes the area of the rectangle with sides $V$ and $-I$:It is neither the open-circuit point nor the short-circuit point, both of which supply zero power.