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An analysis of the optimal spectral splitting for a lateral two-cell solar photovoltaic system is described and tested experimentally. A diffraction grating with arbitrary but known transmission efficiency versus wavelength was used to split the spectrum. An AM1.5 spectrum was produced using a Xe-arc lamp with 5mm pinhole, AM1.5 optical filter for Xe-arc lamps, and a collimating lens. Detailed balance simulations for solar p-n junctions were performed on the AM1.5 spectrum weighted by the optical transmission efficiency of the diffraction grating. When the optical efficiency is included in the detailed balance calculations, an accurate prediction for the performance of the experiment is obtained. Using the simple diffraction grating, we calculate the optimal efficiency of the system under no concentration to be ~23.2% with cells of band gaps 1.14 and 1.82eV. Using mono-Si and CdTe with band gaps of 1.12 and 1.46eV respectively results in an optimal spectral split at 849nm and a total efficiency of 21.1%. Experimentally the result is proven using a mono-Si and CdTe PV array by splitting the spectrum over many wavelengths and finding the optimal split.