The prototype integrates multiple cells stacked into a single device capable of capturing nearly all of the energy in the solar spectrum, researchers said.
The approach developed by researchers at George Washington University (GWU) in the US is different from the solar panels one might commonly see on rooftops or in fields.
The new device uses concentrator photovoltaic (CPV) panels that employ lenses to concentrate sunlight onto tiny, micro-scale solar cells.
Due to their small size - less than one millimetre square - solar cells utilising more sophisticated materials can be developed cost effectively, researchers said.
By the time the light is funnelled through the stack, just under half of the available energy has been converted into electricity.
By comparison, the most common solar cell today converts only a quarter of the available energy into electricity.
"Around 99 per cent of the power contained in direct sunlight reaching the surface of Earth falls between wavelengths of 250 nanometres (nm) and 2,500 nm, but conventional materials for high-efficiency multi-junction solar cells cannot capture this entire spectral range," said Matthew Lumb, lead author of the study published in the journal Advanced Energy Materials.
"Our new device is able to unlock the energy stored in the long-wavelength photons, which are lost in conventional solar cells, and therefore provides a pathway to realising the ultimate multi-junction solar cell," said Mr Lumb.
While scientists have worked towards more efficient solar cells for years, this approach has two novel aspects.
First, it uses a family of materials based on gallium antimonide substrates (GaSb), which are usually found in applications for infra-red lasers and photodetectors.
The novel GaSb-based solar cells are assembled into a stacked structure along with high efficiency solar cells grown on conventional substrates that capture shorter wavelength solar photons.
In addition, the stacking procedure uses a technique known as transfer-printing, which enables three dimensional assembly of these tiny devices with a high degree of precision.
Even though this particular solar cell is very expensive, researchers believe it was important to show the upper limit of what is possible in terms of efficiency.
Despite the current costs of the materials involved, the technique used to create the cells shows much promise, researchers said.