text: The upper limit for efficiency in TPVs (and all systems that convert heat energy to work) is the Carnot efficiency, that of an ideal heat engine. This efficiency is given by:
  where T is the temperature of the PV converter. Practical systems can achieve T= ~300 K and T= ~1800 K, giving a maximum possible efficiency of ~83%. This assumes the PV converts the radiation into electrical energy without losses, such as thermalization or Joule heating, though in reality the photovoltaic inefficiency is quite significant. In real devices, as of 2021, the maximum demonstrated efficiency in the laboratory was 35% with an emitter temperature of 1,773 K. This is the efficiency in terms of heat input being converted to electrical power. In complete TPV systems, a necessarily lower total system efficiency may be cited including the source of heat, so for example, fuel-based TPV systems may report efficiencies in terms of fuel-energy to electrical energy, in which case 5% is considered a "world record" level of efficiency. Real-world efficiencies are reduced by such effects as heat transfer losses, electrical conversion efficiency (TPV voltage outputs are often quite low), and losses due to active cooling of the PV cell.