An exact expression for the elastic energy associated with a semicircular shear dislocation loop emanating from a free surface, such as that of a stressed thin film, is derived (within continuum dislocation theory) and compared with earlier approximations. The energy required to activate a semicircular dislocation loop into its unstable “saddle-point” configuration is then re-calculated, based on the modified expression for the self-energy. It is found that the shear stress necessary to emit a loop, as a function of temperature, is almost 50% less than earlier estimates. The effects of ledges on the surface, as well as loop geometry, are discussed. The principal drawback to this type of calculation is pointed out, namely, that the critical radius of an incipient dislocation loop can be on the order of one atomic spacing, which is too small for a continuum theory to be valid.