The desert, or more accurately the heat, would reduce efficiency of PV cells an the associated electronics.

A solar thermal plant, which makes steam for a turbine.

TMK, there are some solar electricity plants existing, and in the works.

People consider this all the time. The problem isn't space or efficiency, it's cost. Solar panels are not cheap and can't currently compete with the cost of alternative power sources. Hopefully, this will change in the near future and make your suggestion practical.

I'm with Dwane - the problem is cost. There have been many people trying to manufacture solar panels as roofing shingles, and the problem always comes back to cost. It's hard to compete with a peice of wood that costs pennies, a peice of asphalt roofing that costs 10 cents, or even a concrete tile that costs a dollar, when your solar panel costs 10 dollars.

There are a few solar plants that I know of that are very efficient and less costly because they don't use solar panels - they use mirrors to collect the light over a large area, and direct it at a single spot, where a relatively expensive peice of technology converts the light/heat into electricity.

If you are talking about solar thermal plants, they already have them in the desert in California - at Four Corners and Barstow.