An increase in revenue and a tightening of production costs are helping all kinds of companies stay afloat during this recession, but some companies are weathering the storm better than others. When it comes to the solar power industry, First Solar (Nasdaq: FSLR) continues to remain in a league of its own.

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Blinding Results
Last month the company reported Q1 diluted EPS of $1.99 versus $0.57 in the company's year-ago quarter. Quarterly revenue surged 112.4% from $196.9 million to $418.2 million over the same time period. The company benefitted from decreasing manufacturing costs, strong demand for solar modules in the U.S. and Europe and a ramp up in production at its Malaysian manufacturing center.

The results have not been as bright for some of First Solar's peers. On Tuesday, JA Solar Holdings Co., Ltd. (Nasdaq:JASO) swung to a Q1 loss of $28.3 million and said that it is likely to miss its 2009 full-year forecast of $830 million in sales. The company has been hampered by a slump in demand for its solar cells. (For related reading, see Top 10 Green Industries)

Shares of Solarfun Power Holdings, Ltd. (Nasdaq:SOLF) soared 27.2% on Tuesday despite the notion that the company checked in with $1 million Q1 loss as revenue plunged 43%. Solarfun attributed these trends to customers winding down their existing inventories and delaying purchases of new solar cells. The company's stock price was driven higher by the Q1 results coming in ahead of analyst estimates and a "cautiously optimistic" outlook for a turnaround in 2010.

A Cost Leader
Until the economy begins to exhibit some definitive signs of recovery, solar stocks will continue to be challenged. As First Solar noted in its most recent 10-Q, the industry has been moving from a supply-driven environment to a demand-driven environment. And as First Solar has been able to drive the production costs of its panels down to $0.93 per watt, it has a significant advantage over its competitors from a gross margin standpoint. (For more, see Spotlight On The Solar Industry.)

There are several other respectable competitors in the solar space including Suntech Power Holdings (NYSE:STP), that recently announced its plan to manufacture solar products in the U.S., and Yingli Green Energy (NYSE:YGE). However, analyst estimates are calling for the China-based Yingli to experience a 19.2% year-over-year decline in Q1 revenue when the company reports its earnings this week.

A Barclay's analyst recently projected that Yingli might be able to lower its production costs down to $1.30 per watt which would be well off of First Solar's level, but still very competitive. Last week, Yingli announced a multi-year deal in which it will become an exclusive supplier to AES Solar Energy, the joint venture between AES Solar Energy Ltd. (NYSE:AES) and Riverstone Holdings LLC.

The Bottom Line
Solar power is becoming a more economical source of energy every day. The downturn in the global economy has understandably hurt the demand for solar cells, but companies that are able to keep their costs under control will be able to weather this storm. Given its cost leadership, First Solar is among the best-positioned companies in the solar power industry for the long run. (For more, see Clean Or Green Technology Investing.)