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Sholders have been observed in the measured semilogarithmic current-voltage (I-V) characteristics of high-efficiency passivated emitter and rear locally diffused silicon (Si) solar cells. An improved understanding is giben of the mechanism proposed to cause these nonideal I-V curves. It is shown that this mechanism is due to the electrostatic behavior of free carriers at the Si/SiO2 interface of oxidised Si devices in which the Si adjacent to the oxide is depleted (or in some cases, inverted) at equilibrium, and results in saturation of the surface recombination rate. Two-dimensional numerical computer simulations are used to investigate this mechanism and its effect on cell performance. In addition, the simu;ations provide a means to estimating the etent do which lateral conduction in the rear surface channel also contributes ot the observed recombination saturation in these cells. It is shiown that ohmic limitation of lateral conduction occurs, however, the lateral current flows are negligible in comparison to the recombination currents due to the former mechanism.