How do solar panels work?

In a nutshell, a solar cell works as follows: A special material is constructed (based on silicon or other materials) with a positively charged area and a negatively charged area. These two regions are placed close to one another. Photons from the sun hit this material and add enough energy to cause electrons to "jump" from one atom to another, eventually causing them to start flowing from the negative region to the positive region. This flow is harnessed by a flow collector and converted into current.

A more detailed explanation can be found here: http://www.howstuffworks.com/solar-cell.htm

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Several systems and technologies are available today to convert solar energy into electrical energy or electricity.The most common and widely used is photovoltaic (PV). Photovoltaic convert solar energy (energy from the sun) directly into electricity without using any generator or any other additional machinery.Solar panels are made of at least two layers of semi-conductor materials. One layer has a positive charge, and the other has a negative charge. When light hits the top semi-conductor layer, a portion of the energy is absorbed, freeing electrons from the negative layer to flow through an external circuit and back in to the positive layer. This flow of electrons creates electric current. Individual solar panels can be connected to increase the power output, creating a solar array.

How Do Solar Panels Work? (Science in the Real World)