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The history, state of the art and future prospects of the direct generation of electricity from sunlight are reviewed. Although expensive, photovoltaic solar cells have become progressively cheaper over the past five years and are already cost-effective for a wide range of low-power applications. The potential economic and social benefits of these devices are such that intensive and extensive efforts are being made to cut costs still further and encourage market growth. During the 1980s, silicon solar cell systems are expected to become cheaper to run than diesel generators. As a result, they are likely to be adopted for water pumping, irrigation and rural electrification, especially in developing countries. At a later stage, on-site photovoltaic generation may be used for houses, offices, hospitals, schools, shopping centres and factories. But a technological breakthrough to a highly-efficient thin-film cell is needed before photovoltaics can have any significant impact on the large-scale generation of electricity in industrialised countries.