In the field of solar engineering the practical performance of solar energy conversion devices is generally evaluated strictly on an energy (first law) basis . However, the second law of thermodynamics determines the maximum work potential or exergy content of radiative fluxes independent of any conceptual device. The work in this paper quantifies the effect of directional and spectral distribution of terrestrial solar radiation (SR) on its exergy content. This is particularly important as the thermodynamic character of terrestrial SR is very different from that of blackbody radiation (BR). Exergetic (second law) efficiencies compare the work output of a device to the exergy content of the radiative source flux rather than its energy flux. As a result, exergetic efficiencies reveal that the performance of devices in practice is always better than what is indicated by the corresponding energy efficiency. The results presented in this paper introduce the benefits of using exergy analysis for solar cell design, performance evaluation and optimization.