A rotating shadow-band spectroradiometer system is a powerful tool for surveying light in an environment. It can provide the following spectral components of the solar irradiance without using any traditional solar tracking tool: direct normal irradiance (spDNI), diffuse horizontal irradiance (spDHI), and global horizontal irradiance (spGHI). Both irradiances, spDNI and spDHI, are derived from the combination of spGHI observations at different shadow-band positions. The shadow-band system induces basic errors caused by the imperfect corrections of the diffuse irradiance shadowed by band. To restrict the basic errors to < 2 %, the band slant-angle should be < 72° for a usual operating condition of the MS-700 spectroradiometer manufactured by EKO Instruments Co., Ltd., with the MB-20 shadow-band system for MS-700. The errors in the spDNI and spDHI estimation are evaluated quantitatively by using realistic models that consider instrumental and atmospheric conditions. Estimates of spDNI can result in optical depth errors. The relative error in this estimation is described by using a correction coefficient C_fwd defined by the ratio of the true diffuse irradiance simulated by the shadowed irradiance to the approximate value observed. The value of C_fwd depends on the magnitude of the aerosol optical depth as well as the aerosol type. This error analysis should help in improving the accuracy of this system of measurements.