The apparatus focuses the sun's rays onto a metal oxide called ceria to break down water into hydrogen, which can be stored and transported, the BBC reported Thursday.
Ceria has a natural property of emitting oxygen as it heats up and absorbing it as it cools down. If water or carbon dioxide are pumped into the device while the ceria is cooling down the ceria will strip the oxygen from them, liberating either hydrogen or carbon monoxide, the researchers say.
The hydrogen produced could be used to fuel hydrogen fuel cells in cars, while hydrogen mixed with carbon monoxide can create "syngas" fuels.
The prototype is very inefficient, harnessing only between 0.7 and 0.8 percent of the solar energy taken into the vessel, but researchers say they're confident improvements could bring that up to an efficiency of 19 percent, enough for a commercially viable device.
The device could be said to mimic plants, which also use carbon dioxide, water and sunlight to create energy as part of the process of photosynthesis, but one researcher says the analogy is a bit over-simplistic.
"Yes, the reactor takes in sunlight, we take in carbon dioxide and water and we produce a chemical compound, so in the most generic sense there are these similarities, but I think that's pretty much where the analogy ends," Sossina Haile of the California Institute of Technology says.