The big manufacturing equipment that has helped bring down costs for flat-screen TVs based on liquid-crystal-display (LCD) technology may soon bring prices for solar electricity more in line with prices for electricity from the grid. Applied Materials, a company based in Santa Clara, CA, that supplies manufacturing equipment to LCD makers, as well as to major microchip makers, has converted its equipment to produce thin-film silicon solar cells that are cheap enough to compete with more conventional solar cells. This may eventually lead to much cheaper solar power.

Applied Materials first announced its intent to produce equipment for the solar industry last year. Since then, it has sold equipment to several solar-cell manufacturers, including Germany’s Q-Cell, one of the largest solar-cell makers in the world. Last month, Applied Materials announced a new production line that further automates the process. The equipment manufactures solar cells from thin films of amorphous silicon, a material that’s cheaper and more readily available than the crystalline silicon used in most solar cells.

Applied Materials had considered entering the solar market for more than 15 years, says Craig Hunter, the company’s general manager for thin-film products. The processes used to make liquid-crystal displays, which involve depositing extremely thin yet uniform layers of silicon and other materials on large pieces of glass, are nearly identical to those required to produce solar cells made of thin films of silicon.

Applied Materials’ machines handle glass sheets that are thin but cover 5.7 square meters–about the size of a single-car-garage door. “Just by moving huge pieces of sheet glass, you get big economies of scale,” says Howard Branz, principal scientist and a research supervisor for silicon materials and devices at the National Renewable Energy Laboratory, in Golden, CO.

But whereas LCD makers can afford to buy such large equipment because there is an enormous market for flat-screen TVs, until recently, there wasn’t enough demand for thin-film silicon solar panels to justify the investment in the manufacturing tools. One of Applied Materials’ new production lines can make enough solar modules each year to generate 50 to 75 megawatts of electricity–more than the entire market for thin-film silicon just a few years ago, Hunter says. “Today there’s an enormous hunger for that volume of product, and people are excited about being able to build one factory that can produce that much product,” he says.

Two things have happened to make the market bigger. The solar market as a whole has been growing, helped by rising energy prices and government incentives. At the same time, a shortage of the crystalline-silicon material used for conventional solar cells has increased interest in thin-film cells, which use amorphous rather than crystalline silicon. “There’s no shortage of the precursors to amorphous silicon, and there probably never will be,” Branz says.

Applied Materials’ entry into the market could help push solar toward prices competitive with electricity from conventional sources distributed over the electricity grid. In just the next few years, says Hunter, solar modules made with Applied equipment could produce electricity at a cost similar to the price of electricity in some parts of the United States–15 to 20 cents per kilowatt hour.

“There’s significant potential for reducing costs,” acknowledges Branz. But he says that Applied Materials’ customers will face stiff competition from other technologies. “Amorphous silicon’s efficiencies have to get higher if it’s going to compete in a big way,” he says. Indeed, solar cells using amorphous silicon generate less electricity per square meter, hence take up far more room, than solar cells based on crystalline silicon, which are two to three times more efficient. What’s more, in the next couple of years, more production capacity for crystalline silicon will be coming online, cutting into the current cost advantage for amorphous silicon.

Applied Materials will also face competition from up-and-coming alternatives to silicon, including thin-film solar cells made with more-exotic semiconductors, such as those that use a combination of copper, indium, gallium, and selenium. These, like thin-film silicon, use very little active material and could be produced cheaply, but they have the added advantage of having higher efficiency than thin-film silicon.