Faviconer.com is online generator which helps you to convert png file to ico and it's 100% free.
.PNG image, stands for Portable Network Graphics, is a file format to store compressed pictures, without losing quality, even during editing. PNG was invented for Internet purposes and can be used for 24 bit pictures, however this file format can't be used to replace .GIF (with animation support), .JPEG or .ICO. Each of these formats have their own purposes and should be used accordingly. This means that you have to convert image from .png to .ico before using image as Favorite icon for your site.