Applied Materials, MEMC Electronics Solar Push May Not Be As Profitable As Investors Believe

Applied Materials (AMAT) has announced an aggressive push into solar power and MEMC Electronics (WFR) has seen significant benefits from the demand for silicon wafers for solar panels. Unfortunately for both companies, it is increasingly likely that silicon will not be the fundamental building block for the solar-powered future:

Plastic solar cell efficiency breaks record

Three percent was the highest efficiency ever achieved for plastic solar cells until 2005 when David Carroll, director of the Wake Forest nanotechnology center, and his research group announced they had come close to reaching 5 percent efficiency. Now, a little more than a year later, Carroll said his group has surpassed the 6 percent mark.

“Within only two years we have more than doubled the 3 percent mark,” Carroll said. “I fully expect to see higher numbers within the next two years, which may make plastic devices the photovoltaic of choice.”

Certainly there is room for both technologies in the near term. However, we believe many investors are hoping for an unlimited solar opportunity for some companies and that the actual opportunity could be far smaller than is generally believed.