HOW DOES IT WORK?

In simple terms…

Electricity is produced from daylight through a process called solar photo-voltaic.  Photo-voltaic cells are made of semi-conducting materials, so when the daylight strikes, it is converted into electricity.

The technical explanation...

The solar cells are made of several thin layers of silicon. When daylight strikes, the electrons within the cell are knocked loose.  By the absorption of a photon (light particle), the negative electron gets shunted away from the silicon atom, and a positive 'hole' remains.  The freed electron and the positive hole together are neutral.  Therefore, to be able to generate electricity, the electron and the hole need to be separated from each other.  This is done by giving layers within the cell opposite charges, so that the freed electrons cannot return to the positively charged holes.  When the electrical contacts on the front and rear are connected through an external circuit, the freed electrons can only return to the positively charged holes by flowing through this circuit, thus causing electricity to flow.  This means that the greater the intensity of light (larger number of photons), the greater the flow of electricity.
...and what happens if the sun isn't out?

Even if the sky is overcast, PV still produces electricity.  This is because PV cells not only use direct sunlight, but also diffuse solar radiation, which is light that has been scattered by dust and water particles in the atmosphere.  Obviously the amount of useful electricity generated is proportional to the intensity of light energy which falls into the conversion area.  However, you can still have an electricity supply even without the sun!
What about at night?

Despite its advanced technical capabilities, a PV system will not generate electricity at night, but the system is able to store collected energy in a battery for use during non-daylight hours.