Canadian Solar's (Nasdaq: CSIQ) stock ticker may invoke queasiness, but the short sellers are the ones who are a bit green in the face today. Even as I tap out these thoughts, investors are looking at a massive paper gain.

Plenty of other solar names -- from First Solar (NYSE: FSLR) to Yingli Green Energy (NYSE: YGE) -- are riding high today on word that a U.S. solar tax break extension is just around the corner. Canadian Solar just happens to have also reported a terrific quarter.

The Chinese module maker, which sources wafers from LDK Solar (NYSE: LDK) and cells from JA Solar (Nasdaq: JASO), reported revenue of $171 million, which would enable the company to hit the midrange of full-year guidance with no sequential revenue improvement. European buyers accounted for nearly all shipments, which is not an entirely welcome change from last year when there was a more balanced geographic mix. Still, with revenue up about 10-fold, it's hard to complain about the continent from which the cash is pouring in.

In addition to sourcing cells from outside suppliers, Canadian Solar ramped up its internal production, leading to the nearly 11% sequential rise in shipments. A further expansion of solar cell capacity is under way this month, and the firm is also embracing some Trina Solar- (NYSE: TSL) style vertical integration, by moving into ingot and wafer production as well. Canadian Solar is now forecasting up to 400 megawatts of module production in 2009.

Rounding out the picture is the firm's move into upgraded metallurgical grade (UMG) silicon, which we looked at last quarter. Production of UMG-based "e-Modules" began in March, and units started shipping to both U.S. and European customers this month. UMG is a low-cost material that, like scrap silicon, can be blended with virgin polysilicon. If e-Modules are well-received, their contribution to Canadian Solar's future margins could be significant.

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Canadian Solar is rated a meager two stars in Motley Fool CAPS. Think the firm's future is far brighter? Rate it outperform right here.

Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.