QIDONG, China ( TheStreet) -- Solarfun Power Holdings ( SOLF) was up more than 4%, or 39 cents, to $9.90 early Friday, after it announced a significant capacity expansion for 2010.

Solarfun said it will increase its PV module production capacity from 550 megawatts(MW) to 700MW by April 2010, and its PV cell production capacity from 360MW to 480MW by July 2010.

Solar skeptics continue to believe that the solar industry is already headed for the long-anticipated problem of overcapacity. The Chinese solar stocks, including Solarfun Power Holding, didn't evince that fear to start the new year, up the first trading three days, until suffering daily declines on Thursday. Solarfun was down 4.8% on Thursday.

Peter Xie, president of Solarfun, exhibited no fear about overcapacity in the Solarfun statement: "We have an optimistic view on industry demand in 2010 and believe that it is critical to scale up our manufacturing capacity. We are expecting to see strong demand from areas with increased subsidies to solar projects such as China and the United States."

Solarfun's positioning in the Chinese market, as well as the positioning of other Chinese solar upstarts, is among the trends expected to shine on them in 2010 as the Chinese government continues its massive environmental and alternative energy programs.

-- Reported by Eric Rosenbaum in New York.

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