Principal component analysis is used to characterize approximately 7000 downwelling solar irradiance spectra retrieved at the Southern Great Plains site during an Atmospheric Radiation Measurement (ARM) shortwave intensive operating period. This analysis technique has proven to be very effective in reducing a large set of variables into a much smaller set of independent variables while retaining the information content. It is used to determine the minimum number of parameters necessary to characterize atmospheric spectral irradiance or the dimensionality of atmospheric variability. It was found that well over 99% of the spectral information was contained in the first six mutually orthogonal linear combinations of the observed variables (flux at various wavelengths). Rotation of the principal components was effective in separating various components by their independent physical influences. The majority of the variability in the downwelling solar irradiance (380–1000 nm) was explained by the following fundamental atmospheric parameters (in order of their importance): cloud scattering, water vapor absorption, molecular scattering, and ozone absorption. In contrast to what has been proposed as a resolution to a clear‐sky absorption anomaly, no unexpected gaseous absorption signature was found in any of the significant components.