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The performance of perovskite solar cells recently exceeded 15% solar-to-electricity conversion efficiency for small-area devices. The fundamental properties of the active absorber layers, hybrid organic-inorganic perovskites formed from mixing metal and organic halides [e.g., (NH4)PbI3 and (CH3NH3)PbI3], are largely unknown. The materials are semiconductors with direct band gaps at the boundary of the first Brillouin zone. The calculated dielectric constants and band gaps show an orientation dependence, with a low barrier for rotation of the organic cations. Due to the electric dipole of the methylammonium cation, a photoferroic effect may be accessible, which could enhance carrier collection.