Heat ½ inch of oil over medium heat in a heavy skillet to approximately 350 degrees F. Place cubed potatoes in a food processor with the chopping blade. Pulse 15 to 20 times, until the cubes are very small, about ⅛ inch. Add onion, flour, matzo meal, baking powder, eggs, salt, and pepper. Pulse 10 to 15 times, until all ingredients are well incorporated. Let rest 10 to 15 minutes. Scoop ¼ cup of the potato mixture per pancake into hot oil (do not fry more than 5 latkes at a time). Fry about 4 to 5 minutes per side, until latkes are golden brown on both sides. Transfer to paper towels and drain. Serve with sour cream and/or applesauce.