Solar energy now accounts for over 1% of the world's electricity each year, and the industry is growing at a rapid rate. Behind all of the solar installations are small pieces of silicon that turn the sun's energy into usable electricity. 

In a broad sense, all solar cells work the same way. When the sun's energy hits them it excites electrons within the cell, jolting them loose from their atomic home. The goal of the cell is to give those electrons an incentive to find a conductor like silver or copper before they find another home within the cell. The cell's design, construction, and thickness all play a role in how costly or efficient the cell is for manufacturers. Here are a few big factors to keep in mind when looking at solar cells.  

Cole up of solar cell.

Image source: Getty Images.

The type of solar cell matters

There are two main types of construction of traditional solar wafers that are then turned into cells, and they're based on the silicon that is the cell's raw material. 

  • Multi-crystalline silicon solar cells are made up of fragments of silicon formed together to make wafers and then a solar cell. This design is lower cost than mono-crystalline cells but is less efficient.
  • Mono-crystalline solar cells are made from a single crystal that is formed in a bar and then cut into wafers to make cells. The process is more expensive than multi-crystalline cells, but the purity allows electrons to flow more freely, generating more electricity per cell. For example, JinkoSolar's (NYSE:JKS) multi-crystalline cells averaged 18.7% efficiency in 2016, while its mono-crystalline cells averaged 21% efficiency. 

Once the thin wafer is created, it's doped to make a cell. There are two main types of solar cells: p-type and n-type. The difference comes down to how the silicon wafers are doped with boron (p-type) phosphorus (n-type) or other elements to augment the cell's performance. What's important at a broad level is the qualities the different cell constructions display. 

  • P-type solar cells are most common today and have been the basis for the solar industry's growth over the past decade. The preference for p-type cells dates back to the days when outer space applications were the main use for solar energy, and their advantage has continued largely out of continued momentum. Standard equipment can make a p-type solar cell that's up to 19% efficient, meaning most solar modules are 15% to 17% efficient today. The downside is that p-type solar cells are generally behind the efficiency of n-type cells and suffer from light-induced degradation (LID), which reduces a module's output by 2% to 4% in the first few weeks it's in operation. 
  • N-type solar cells generally have higher efficiency and don't suffer from LID the same way p-type cells do. But they've traditionally been more expensive, pushing their use to high-efficiency applications like SunPower's (NASDAQ:SPWR) interdigitated back contact cells. 

As you would expect, there is a cost-benefit trade-off in choosing the type of crystalline silicon and between p-type and n-type cells. And what a manufacturer chooses determines where it sits in the industry's strategic landscape. 

Who is making what type of solar cells? 

Most major Chinese solar manufacturers produce a combination of multi and mono p-type solar cells. Canadian Solar (NASDAQ:CSIQ), JinkoSolar, and JA Solar (NASDAQ:JASO) all make multi- and mono-crystalline cells. Hanwha Q-Cells (NASDAQ:HQCL) focuses mainly on multi-crystalline cells right now. 

Since SunPower is the one company whose main business is mono-crystalline n-type solar cells, it's making the most efficient solar modules in the world. 

What's clear right now is that the market is trending toward mono-crystalline solar cells because of their higher efficiency, and it could soon move to more n-type cells as well. Being ahead of the game in their production should be an advantage for solar manufacturers. 

Travis Hoium owns shares of SunPower. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.