Semiconductor quantum dots may be used in so-called third-generation solar cells that have the potential to greatly increase the photon conversion efficiency via two effects: (1) the production of multiple excitons from a single photon of sufficient energy and (2) the formation of intermediate bands in the bandgap that use sub-bandgap photons to form separable electron–hole pairs. This is possible because quantization of energy levels in quantum dots produces the following effects: enhanced Auger processes and Coulomb coupling between charge carriers; elimination of the requirement to conserve crystal momentum; slowed hot electron–hole pair (exciton) cooling; multiple exciton generation; and formation of minibands (delocalized electronic states) in quantum dot arrays. For exciton multiplication, very high quantum yields of 300–700% for exciton formation in PbSe, PbS, PbTe, and CdSe quantum dots have been reported at photon energies about 4–8 times the HOMO–LUMO transition energy (quantum dot bandgap), respectively, indicating the formation of 3–7 excitons/photon, depending upon the photon energy. For intermediate-band solar cells, quantum dots are used to create the intermediate bands from the con fined electron states in the conduction band. By means of the intermediate band, it is possible to absorb below-bandgap energy photons. This is predicted to produce solar cells with enhanced photocurrent without voltage degradation.