A strong demand from the European and Asian markets propelled SunPower’s second-quarter revenue by 120 percent, the company reported Thursday.

The company, asolarpanel maker and power plant developer, generated $382.8 million in revenue during the second quarter, a 120 percent jump from $173.8 million a year ago. Its net income rose to $28.61 million, or $0.34 per share, from a loss of $5.35 million, or -$0.07 per share, from a year ago.

SunPower (NSDQ: SPWR) has benefited from public solar electric rate subsidies in countries such as Spain and saw a growing demand from markets like South Korea and the United States, said CEO Tom Werner in a statement.

The company, based in San Jose, Calif., announced last week it will develop two projects, totaling 35 megawatts, for Florida Power & Light (see SunPower to Build 35MW Plants in Florida and SunPower CEO Says Spain, Korea Could Boost Solar Growth).

SunPower said the cost of silicon, which is the raw material for making solar panels, declined in the second quarter. The company said it expects the cost to continue to drop and has secured enough supply to last through 2010.

The company raised its outlook for 2008, but it expects the third-quarter revenue to decline from the second-quarter number. The guidance would meet or exceed Wall Street’s expectations, which usually exclude special charges and stock-based compensations.

SunPower anticipates a non-GAPP earning of $0.53 to $0.57 per share on $340 million to $355 million in revenue for the third quarter. Analysts surveyed by Thomson Financial expect $0.57 per share for the third quarter, reported the AP.

For the fourth quarter, SunPower expects a non-GAPP earning of $0.73 to $0.80 per share on $395 million to $425 million in revenue. Wall Street expects $0.70 per share on $390.4 million in revenue. For 2008, the company expects $2.26 to $2.36 per share on $1.39 billion to $1.44 billion in revenue. Analysts expect $2.17 per share.

SunPower shares fell 5.02 percent to reach $76.13 per share in recent trading.

Uncertainties over public solar electric rate subsidies in Spain and an expiring investment tax credit in the United States for renewable energy developers have worried solar energy equipment makers and their customers worldwide.

Spain currently has a lucrative feed-in tariff that requires utilities to pay a higher price for solar energy than for power generated by conventional means. But the government is looking at shrinking the subsidies and is set to make a decision by the end of September (see Spanish Solar Group: Don’t Change Feed-In Tariffs).

“Within solar, we expect strong results from the solar complex in 2Q08 led by strong pricing in Spain; however, we do not see quarterly results being a catalyst for shares due to uncertain 2009 demand trends,” said financial analyst Jeff Osborne from Thomas Weisel Partners, in a research note. “We see investors needing to take a longer term approach against an uncertain backdrop of policy and pricing.”

Failure by the Congress to extend an investment tax credit that shaves 30 percent off the costs of building solar, wind and other renewable energy projects in the United States also has raised alarm (see No Tax Credit, No Solar Power).

The current law will sunset at the end of this year. Advocates have lobbied hard to extend the multi-year tax credit, but Republicans and Democrats have bickered over issues such as how to pay for the incentives (see Senate Blocks Renewable Incentives Bill and Solar Sharpens Weapons for Incentive Battle).

On Wednesday, Chinese solar company Trina Solar (NYSE: TSL) said it expects its second-quarter revenue to reach between $200 million and $205 million, a jump from the $75.3 million in revenue for the second quarter of 2007 and an increase of 65 percent to 70 percent from the first-quarter revenue of $120.7 million.

Trina said it expects to meet or exceed its 2008 target revenue of $770 million to $808 million. Its shares fell 4.4 percent to $31.97 per share in recent trading.