The partitioning of the incident solar irradiance among reflection to the atmosphere, absorption in the snow and ice, and transmission to the ocean is a critical component of the summer melt cycle of Arctic sea ice. Observations from a year-long field experiment (Surface Heat Budget of the Arctic Ocean (SHEBA)) showed that of the solar radiation incident between 1 April and 5 October 1998, 68% was reflected to the atmosphere, 24% was absorbed in the snow and ice, and 8% was transmitted to the ocean. The amount of energy reflected to the atmosphere was greatest in May, when the surface albedo and the incident irradiance were large. The energy absorbed in the snow and ice increased slowly in April and May in conjunction with the increase in incident solar irradiance, followed by a sharp increase in June associated with the onset of melt. In spring, virtually none of the solar energy incident on snow-covered sea ice is transmitted to the ocean compared to over 90% of that incident on leads. The energy transmitted to the ocean reached a maximum near the end of the melt season in mid-August when the albedo and ice thickness were at minima and lead and pond fractions were at maxima. While much of the solar energy transmitted to the ocean was through leads, substantial portions were also transmitted through bare ice (23%) and ponded ice (16%). During the melt season, the combined energy transmitted through bare ice and ponds was equivalent to that through leads. This marked a significant change in the interaction of solar energy with the sea ice cover, with substantial amounts of solar energy transmitted to the ocean through the thin summer ice cover of SHEBA compared to the thicker ice studied in 1975 (Arctic Ice Dynamics Joint Experiment (AIDJEX)).