Photovoltaic (PV) Cells

Solar Energy
Photovoltaic (PV) cells are made of special materials called semiconductors such as silicon, which is currently the most commonly used. Basically, when light strikes the cell, a certain portion of it is absorbed within the semiconductor material. This means that the energy of the absorbed light is transferred to the semiconductor. The energy knocks electrons loose, allowing them to flow freely. PV cells also all have one or more electric fields that act to force electrons freed by light absorption to flow in a certain direction. This flow of electrons is a current, and by placing metal contacts on the top and bottom of the PV cell, we can draw that current off to use externally. For example, the current can power a calculator. This current, together with the cell's voltage (which is a result of its built-in electric field or fields), defines the power (or wattage) that the solar cell can produce.
The other many method of using solar energy is called solar thermal. Rather than converting sunlight to electricity, the heat from sunlight is used. This heat can be used in a variety of ways. For instance, it is possible to use it to heat the water in your home or for a swimming pool instead of a hot water heater (this is typically done by running water through black pipes which get hot in the sun). It is possible to use it to heat your home, instead of a heater in fact (this also usually done by heating water and circulating the hot water through radiators in your house).
You can also use the sun's heat to generate electricity, and if fact, most electricity produced directly from the sun's energy is produced by this method (and not by PV, as described above, although PV is more commonly thought of as "solar energy"). Solar thermal electricity is generated by heating a special material (a type of high temperature oil) to very high temperatures using focused sunlight (the light is typically focused using parabolic mirrors that focus the sunlight onto a tube of this special material, heating it to several thousand degrees). This very hot liquid is then moved to a generating station, where the heat is used to turn a turbine, and that makes electricity.See the Related Questions links to the left of this answer for more information about the uses of solar energy