SAN JOSE — As demand for clean energy rises around the world, the nation's high-tech hub is looking to squeeze more money out of silicon.
Engineers and entrepreneurs in Silicon Valley are taking advantage of their expertise in computer chips to design and manufacture electricity-generating solar cells that they hope will be increasingly competitive with traditional energy sources such as coal and natural gas. Most solar cells and chips are made from the same raw material from which the valley gets its name.
"We're in the very early stages of a long build-out in solar technology," said Erik Straser, who heads the "clean tech" practice at Menlo Park venture capital firm Mohr Davidow Ventures. "The potential is really enormous."
Despite technological advances since the photovoltaic cell was invented 50 years ago, solar is still two to three times more expensive than fossil fuel in the U.S. and relies on government subsidies to compete.
But improving technology, falling costs, rising prices for fossil fuel, concerns about the electric grid's stability and worries about global warming are all raising interest in solar energy. The industry is expected to grow from $11 billion in 2005 to $51 billion in 2015, according to a projection by Clean Edge Inc., a market research firm focused on clean technology.
And that's why Silicon Valley is getting involved.
This month, Applied Materials Inc., a Santa Clara company that manufactures chip-making equipment, announced plans to sell tools for producing solar cells. The company projects the market for such gear will triple to $3 billion over the next four years.
The company's equipment can be retooled for silicon solar wafers, while another of its technologies -- for making flat-panel displays -- can be applied to "thin film" solar cells sprayed onto glass and other flat surfaces.
"By lowering the cost and increasing the volumes, we think that solar power will become much more affordable in more places in the world," Chief Technology Officer Mark Pinto said.
Cypress Semiconductor Corp. of San Jose was one of the first Silicon Valley chip makers to cross over into the solar sector.
Four years ago, Cypress founder T.J. Rodgers persuaded his board to buy a majority stake in solar cell maker SunPower Corp., founded by his former Stanford University classmate Richard Swanson. Rodgers contended that Cypress' manufacturing technology could be used to reduce costs and expand production of SunPower's cells.
