An energy conversion system includes a water-containing vessel with a transparent sidewall. Energized carbon rods are fed into the vessel such that the carbon rods are immersed in the water. The carbon rods are juxtaposed sufficiently that electrical arcing occurs between them, causing decomposition of some water molecules into constituent hydrogen and oxygen gas. Photon emissions resulting from the arcing are collected by photovoltaic cells placed around the sidewall of the vessel. The hydrogen gas is cooled by passing it through a water reservoir which also provides a source for water in the vessel. The cooled hydrogen gas may be used to fuel an internal combustion engine. Byproduct heat from the arcing reaction may be utilized in a Stirling engine or radiated from the system. As the carbon rods become depleted during arcing, additional rods are fed through conductive sleeves into the vessel by linear actuators.