The Sun is an essentially unlimited source of free energy—the amount of solar energy that reaches Earth's surface in just one hour is more than the total amount of energy that the world would use in a year. Furthermore, unlike the consumption of fossil fuels, the consumption of solar energy does not produce harmful emissions. The ability to capture and convert solar radiation into usable energy is a great opportunity to make use of an environmentally friendly and abundant source of energy.

While the solar technology industry is currently experiencing rapid growth as interest in renewable energy increases, humans have actually been harnessing solar energy since ancient times. For example, some of the earliest ways to make use of solar energy were to use glass to focus sunlight to light a fire, and to build homes and bathhouses facing in the sunniest direction. Today, there are three main types of solar energy technologies: concentrating solar power (CSP), photovoltaics (PV), and solar heating.

CSP uses reflective surfaces to concentrate solar radiation onto receivers that then convert it to heat. Solar energy collected this way is used to produce electricity with conventional steam turbine generators. Because CSP plants rely on direct-beam sunlight, they can only be located in areas that receive plentiful sunshine. In the United States, most of the CSP plants are located in the Southwest, although there are plants in development in other areas. CSP technologies are generally used on a large scale, although smaller systems are also possible.

For most small-scale applications, such as residential buildings, PV and solar heating systems are used. PV systems convert sunlight directly into electricity using special cells made of semiconductor materials that produce an electrical charge when struck by solar radiation. This type of technology is especially useful for rural areas that do not have access to the electrical grid; there are many programs that offer financing for PV installation in rural or poor areas of developing countries (such as Bangladesh, China, India, Kenya, and Mexico). Grid-connected PV systems are also growing in popularity: as of 2009, there were over a million homes with solar panels feeding energy into utility grids. Germany accounts for a large part of the global market, although various incentives, such as subsidies, tax credits, and net metering (the policy that allows the excess power generated by a home to be sold back to the grid), are helping to make this technology more widespread.

Solar heating gathers solar radiation and transforms it to heat air or a fluid. A common type of solar collector, a flat-plate collector, consists of a flat box with a transparent cover and a dark absorber plate. Heat builds up inside the box, warming the air or fluid (typically water or an antifreeze solution) that flows through it. Solar heat collectors, such as hot water heaters, are common in several countries; nearly 50 millions homes worldwide use solar hot water, and there is a growing trend to install these systems. Some countries, such as Israel and Spain, even have mandates that require minimum levels of solar hot water for new buildings.

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