Appropriately enough, the solar reports for the latest quarter are like night and day.

In the West, we saw Energy Conversion Devices (NASDAQ:ENER) talk up its business momentum as its stock tanked, and Evergreen Solar (NASDAQ:ESLR) prep the few remaining faithful for yet another capital raise. Europe's REC had an even worse outing, if you can believe it.

Then, on Thursday, along came JA Solar (NASDAQ:JASO) with a report that was downright luminous. Put plainly, the Chinese cell maker is eating higher-cost Western solar players' lunch.

In the fourth quarter, shipments were up more than 30% compared with the previous quarter, gross margins pushed north of 20%, and JA Solar generated a bundle of operating cash flow. It's a great time to be a low-cost supplier of solar cells.

JA Solar's new CEO Peng Fang, recently poached from LDK Solar (NYSE:LDK) affiliate Best Solar, described the situation this way: "Several European solar manufacturers have a strong brand, sales channel and access to end market, but do not have the right cost structure, and they cannot compete effectively in the new market and pricing environment." This situation alone is enough to drive European operators to outsource their manufacturing, and the pending reduction in German subsidy rates is accelerating the trend.

Upon the request of some customers, JA Solar is moving into module production. Like ReneSola (NYSE:SOL), which just pulled down a major 600-megawatt order this week, JA Solar will take the original equipment manufacturer (OEM) approach, keeping its brand off the panel. The company plans to ramp up to 300 megawatts of capacity by the end of the year. On top of this, JA Solar is also starting up in-house ingot and wafer production, which is purely a cost-driven move.

Another major development is the near-term commercialization of JA Solar's high-efficiency cell technology, which has reached 18.7% efficiency. This positions the company to take a shot at Suntech Power's (NYSE:STP) Pluto offering, while undercutting that company on the cost front.

As far as the outlook for 2010, it's no shock that the first half of the year looks good, with demand exceeding capacity as German end users rush to get ahead of the feed-in tariff cut. What caught me by surprise was the statement that JA Solar sees second-half demand coming in even stronger. I told you this was a seriously sunny report.

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Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his Motley Fool CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.