A one-dimensional radiative transfer algorithm that considers correlations between the optical thckness and the incident direct solar irradiance is developed to compute the domain-averaged shortwave irradiance profile. It divides the direct irradiance into four components and treats the direct irradiance in two separate columns, clear and cloudy columns so that the direct irradiance in the cloudy column is attenuated quicker than that in the clear column. The horizontal inhomogeneity of clouds in the cloudy column is treated by the gamma weighted two-stream approximation, which assumes that the optical thickness of clouds follows a gamma distribution. The algorithm inputs the cloud fraction, cumulative cloud fraction as a function of height, and a parameter expressing the shape of the probability density function of the cloud optical thickness distribution in addition to inputs required for a two-stream radiative transfer model. These properties of cloud required for the input can be obtained using ground- and satellite-based instruments. Therefore, the algorithm can treat realistic cloud overlap features and horizontal inhomogeneity of clouds in a framework of a one-dimensional radiative transfer algorithm. Heating rates computed by the algorithm using cloud fields generated by cloud resolving models agree with those computed with a Monte Carlo model.