ReneSola (NYSE: SOL) emerged as one of the bright spots among solar chipmakers with its second-quarter results. Amid the economic slowdown that has affected the industry, ReneSola managed to stay profitable, as its shares surged 14%.

A look at the quarter
Revenues fell slightly to $249.3 million, from $253.9 million a year ago, but they plunged 30.6% on a sequential-quarter basis as prices of solar wafers fell sooner than expected. Subsidy cuts in Europe pulled down demand and led to an oversupply, dragging the average selling prices down. This has affected bigger players such as First Solar (Nasdaq: FSLR) and SunPower (Nasdaq: SPWRA), too. First Solar's revenues dropped 9% from the year-ago quarter, and SunPower reported a net loss of $147.9 million. ReneSola has performed relatively better in that regard.

Cashing in
The balance sheet shows cash and cash equivalents at an impressive $480.8 million, which is among the largest cash positions in the entire industry. That's significant, since it lets the company lever its expansion and product-development plans and position itself for growth in the long term.

Innovating the way ahead
ReneSola leads the way in innovation with its Virtus wafer, which has been approved by a number of solar-cell manufacturers. The wafer has an average cell-conversion efficiency rate of 17.5%, at least 1% higher than the industry standard -- and it comes at a lower cost. The company intends to begin mass production this year and will replace all its multicrystalline wafers with Virtus, leading to lower production costs and improved margins.

What's more, in-house production of polysilicon allows the company to keep costs to $40 a kilogram, compared with the market rate of $50 per kilogram, and the company expects costs to fall further. These measures will both go a long way in strengthening operations and improve profitability.

The Foolish bottom-line
Even in adverse circumstances for its industry, ReneSola has maintained its profitability. The company has withdrawn its guidance for the rest of the year as it shifts to mass production of Virtus, and that move may affect the company in the short run. However, the company looks poised for growth in the long term, with strong fundamentals and plenty of cost-reduction and product-innovation plans in place.