Ternary system hybrid solar cells that are composed of CdSe nanodots, poly (3-hexylthiophene) (P3HT) and phenyl-C-61-butyric acid methyl ester (PCBM) with an inverted structure were investigated. The incorporation of 10 wt% CdSe nanodots showed increased power conversion efficiency (PCE) of 3.05% compared with that of a binary system with P3HT and PCBM, which is comparable with the best reported efficiency of nanocrystal based solar cells. The photophysical energy level of inverted structure and electrochemical, optical properties and microscopy images of the ternary systems were systematically investigated to elucidate the mechanism. The obtained hybrid solar cell showed enhanced stability through exposure in ambient condition without any encapsulation. (c) 2011 Elsevier Ltd. All rights reserved.