Abstract In the last decade, the photovoltaic industry grew at a rate exceeding 30% per year. Currently, solar-cell modules based on single-crystal and large-grain polycrystalline silicon wafers comprise more than 80% of the market. Bulk Si photovoltaics, which benefit from the highly advanced growth and fabrication processes developed for microelectronics industry, is a mature technology. The light-to-electric power conversion efficiency of the best modules offered on the market is over 20%. While there is still room for improvement, the device performance is approaching the thermodynamic limit of ∼28% for single-junction Si solar cells. The major challenge that the bulk Si solar cells face is, however, the cost reduction. The potential for price reduction of electrical power generated by wafer-based Si modules is limited by the cost of bulk Si wafers, making the electrical power cost substantially higher than that generated by combustion of fossil fuels. One major strategy to bring down the cost of electricity generated by photovoltaic modules is thin-film solar cells, whose production does not require expensive semiconductor substrates and very high temperatures and thus allows decreasing the cost per unit area while retaining a reasonable efficiency. Thin-film solar cells based on amorphous, microcrystalline, and polycrystalline Si as well as cadmium telluride and copper indium diselenide compound semiconductors have already proved their commercial viability and their market share is increasing rapidly. Another avenue to reduce the cost of photovoltaic electricity is to increase the cell efficiency beyond the Shockley–Queisser limit. A variety of concepts proposed along this avenue forms the basis of the so-called third generation photovoltaics technologies. Among these approaches, high-efficiency multi-junction solar cells based on III–V compound semiconductors, which initially found uses in space applications, are now being developed for terrestrial applications. In this article, we discuss the progress, outstanding problems, and environmental issues associated with bulk Si, thin-film, and high-efficiency multi-junction solar cells.