NEW YORK ( TheStreet -- First Solar ( FSLR) provided the first earnings surprise of the solar season -- but will it be the last surprise, or the biggest one?

Maybe not, based on the way that shares of JA Solar ( JASO) were trading on Monday. JA Solar shares were up 12% on Monday, yet there was no obvious news from the Chinese solar cell company.

While Monday was an up day for the solar sector, JA Solar's one-day returns far outpaced optimism in the solar sector. Perhaps investors were betting on an easy beat by JA Solar in its upcoming earnings, as pricing power remains in the hands of the cell-and-wafer players given current demand levels. JA Solar already announced earlier this quarter that its shipments would come in ahead of previous estimates.

As far as the optimism about solar demand that could lead to more positive earnings surprises, a report from Europe's main solar trade group on Tuesday estimated that the solar market will grow to a demand level close to 13 gigawatts this year, in line with the more rosy forecasts for solar demand that have changed the nature of debate about the impact of the looming feed-in tariff cuts in Germany.

First Solar's ability to shift its business to modules sales into Germany and other European countries in response to the massive demand levels in the first half of 2010 led to a first quarter beyond the Street expectations, and led First Solar to raise its earnings guidance for 2010. From its share-price doldrums earlier this year around $100, First Solar has rallied to above $140 on the strength of its outlook -- though immediately after its earnings last week, First Solar shares had shot all the way above the $150 mark.

JA Solar was immediately down 5% at the open on Tuesday, and First Solar and all the other solar players were joining in the selloff as the markets went into a tailspin as European debt fears continued to weigh heavily on trading. Maybe JA Solar's big up day on Monday just means that things are back to normal in solar, with huge, unexplainable rallies followed by volatile downswings compounded by overall market sentiment.

All the fears that the Chinese solar players were set to overtake First Solar now seems an argument on shakier ground, as First Solar stakes out a bold plan to reach 30% market share. The shakeout in the solar sector will have the Chinese solar companies taking market share, but will it be market share gains from just about every company but First Solar?

The First Solar earnings report wasn't all perfection, as the U.S. solar bellwether made virtually no progress on cutting costs or increasing efficiency of its solar panels -- lack of progress on key metrics in solar that won't help if solar follows its typical pattern of big booms being followed by as big busts.

First Solar's earning surprise won't be the biggest in the solar sector either when it comes to benefiting from the boom.

Indeed, the JA Solar spike on Monday could reflect the sentiment of a recent poll we ran on TheStreet, asking solar-savvy readers which solar company would provide the biggest surprise in this earnings season.

We've already had one negative surprise this earnings season, with MEMC Electronic Materials ( WFR) finding a way to disappoint solar investors even amid the current boom conditions in the sector.

It's also interesting to note that even as optimism again reigns supreme in solar, shares of many solar companies are not trading any higher than they were in early 2010, when the demand forecasts were much lower and the German feed-in tariffs a bigger unknown.

Chinese module players like Trina Solar and Yingli Green Energy ( YGE) have rallied off lows reached earlier in 2010, but are trading at levels that are no higher than where they were after an early January selloff in the solar sector stemming from the German feed-in tariff cut plans.

The only solar companies trading this week considerably higher than where they traded after January's selloff are First Solar and JA Solar, and two wafer makers. In the wafer space, both LDK Solar ( LDK) and ReneSola ( SOL) are also trading at high points for the year, as the pricing power at the level of wafer-and-cell suppliers boosts the short-term fortunes of these companies.

Yet Chinese module makers like Yingli, and even Trina, have not benefited nearly as much from the improving solar demand outlook.

The results of the survey asking TheStreet alternative energy investors which solar companies' earnings would provide the biggest jolt to share price seems to reflect two trends, pricing power in solar as demand crests, and the recent underperformance of shares like Yingli Green Energy positioning the company for a rally on its earnings. Which brings us, finally, to our results:

Approximately 25% of solar investors in the survey audience think that it will be Yingli Green Energy that experience the biggest earnings rally.

Notably, Yingli's share price has not recovered at all this year, even as many solar shares have risen as fears of a worst-case scenario in Germany ebbed and the demand forecasts started coming in much higher than expected. Yingli's shares today are more or less exactly where they were -- between $12 and $13 -- after a huge selloff in Yingli shares from a 2010 high above $18 in January.

Thus, readers seem to think Yingli is the sleeping earnings giant, ready to pop, even though there are still widespread fears among the analyst community that Yingli's ramp-up of its polysilicon plant will continue to cut into its short-term earnings power.

Monday's big winner in solar, JA Solar, was second among survey takers, with 21% of poll respondents betting that JA Solar will deliver the biggest earnings rally. It's not really going out on limb for investors to make this call. JA Solar already guided higher earlier in the quarter, and JA Solar was the biggest earnings rally stock in solar in the fourth quarter, too. The question for JA Solar investors may be this: given that JA Solar just about reached its 52-week high on Monday -- at a $6.92 intraday high versus an annual high of $6.95 -- how much room is there for a rally in JA Solar shares?

Suntech Power ( STP) is in the same boat as Yingli, with its shares having fallen off the deep end in January and having not recovered since that early 2010 trough. Suntech shares are trading where they have been for much of the year, between $13 and $14 a share, and show no major sign of benefiting from the recent improvement in the demand outlook.

Suntech's high cost structure is the long-term overhang on its stock, equivalent to the short-term overhang on shares of Yingli, but is the overhang on Suntech shares overdone?

Investors responding to TheStreet seem to think so. Approximately 16% of survey takers think that Suntech is positioned to deliver the biggest earnings surprise, behind only JA Solar and Yingli Green Energy.

Trina Solar finished fourth among the Chinese solar companies, with 14% of survey respondents betting that Trina Solar shares would benefit the most come earnings time. Since Trina indicated last quarter that it did not expect to keep its gross margin at a record level in the first quarter, its conservative outlook could be the culprit in less overt enthusiasm headed into earnings.

Trina has not underperformed to the level of either Suntech or Yingli either. Trina shares aren't back to the level above $30 where they began 2010, but Trina shares have experienced a modest rally since a March low at $20 per share.

As for the big U.S. solar power yet to report, SunPower ( SPWRA), the company said in its guidance in the fourth quarter to expect a breakeven first quarter report, and investors are taking SunPower at its word. SunPower's shares have continued lower all year -- and reached a new low of $16 per share this month -- a share price trend that supports the poll view that only 10% of investors are willing to bet on a positive earnings surprise from SunPower.

-- Reported by Eric Rosenbaum in New York.


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