QUIDONG, China ( TheStreet) -- On Thursday, Suntech Power Holdings ( STP) reported earnings that beat the street soundly. Next up among the Chinese solar stocks with fourth quarter earnings will be Solarfun Holdings ( SOLF) on Friday morning. Solarfun Holdings seemed to be getting a pre-earnings bump on Thursday afternoon after Suntech was the latest solar company from China to report earnings outperformance. Since Jan. 11, Solarfun's share price has declined by more than $3. In the end, Solarfun Holdings has the task given to all the solar firms this earnings season: to make a compelling case that the pressure on average sales price in the second half of 2010 won't far exceed solar industry cost efficiencies. On Thursday, solar investors heard another bullish report about 2010 regardless of the coming feed-in tariff reductions in Germany. Suntech said it expects rates of return on German solar projects in the third quarter to remain at a level equivalent to the historical returns of 8%. Some analysts question whether the historical rate of return is good enough to drive demand for new solar projects. One analyst who does not cover Solarfun specifically -- but does cover many of the Chinese solar companies -- noted that it is excess -- not historical -- rates of return that drive demand for solar. "It's not just about the volume; it's about the price that volume can command," said the solar analyst. Since just about every Chinese solar company that has reported so far has made it clear that their production capacity for 2010 will be large, it is still an open question as to whether the market will be able to absorb all that solar capacity without significant declines in module pricing. Solarfun was up on Thursday ahead of its earnings, with a gain of 3% in the early afternoon, second-best in the solar sector on Thursday after Suntech, which was up 5% on the strength of its earnings outperformance.