'''Absorption''' – Certain molecules in the atmosphere posses high photon absorption properties. For example, water vapour (H<sub>2</sub>O) and CO<sub>2</sub>
have absorb far infrared radiation and ozone (O<sub>3</sub>) absorbs ultraviolet radiation. Energy that is absorbed here is unavailable for use by solar panels.
'''No Interaction''' – About 70% of the incoming radiation will pass through the atmosphere undisturbed. This known as beam or direct radiation.
The losses due to atmospheric effects do not cause any major dips in the radiation spectrum. Rather, the impact is an overall reduction in the intensity of the entire spectrum. Depending on the time of the day, the sun's apparent position in the sky changes and as a result the length of atmosphere that the radiation must travel through also changes. When the sun is directly overhead, this length is referred to as the
air mass (AM). Moving away from this overhead position, the travel distance required to hit the collecting surface increases. Figure 3 is simple schematic showing this effect.
For theoretical calculations a number of sky models have been developed. The most basic model assumes that diffuse component of radiation is constant regardless of orientation. This means that all of the diffuse radiation is derived only from atmospheric scattering and equally from all directions. The Isotropic Sky model applies the same assumption but also includes diffuse radiation resulting from ground reflected radiation.
Two main phenomena, circumsolar radiation and horizon brightening, are ignored by the preceding models. Circumsolar radiation refers to the greater concentration of diffuse radiation existing in the sky immediately around the location of the sun relative to the remainder of the sky; Horizon brightening refers to the greater concentration of diffuse radiation existing on the horizon relative to the remainder of sky. These two components are accounted for in the Anistropic Sky model, however are generally not required for system performance analysis.