NEW YORK (Bloomberg) — Suntech Power Holdings Co., the fourth-largest maker of solar-power cells, said first-quarter profit rose 35 percent on surging demand for the renewable energy source.Net income rose to $26.1 million, or 16 cents a share, from $19.3 million, or 12 cents, a year earlier, Suntech, based in China's Jiangsu province, said today in a statement. Sales more than doubled to $246.7 million from $89.9 million.

World-wide solar-cell sales rose 41 percent to 2,500 megawatts last year, led by California and Germany, which increased incentives for rooftop installations on homes and businesses, according to industry group Clean Edge. The group forecast a quadrupling of the market to $69.3 billion by 2016.

"We have captured most of the increase in demand because we deliver the best quality cells and we do it on time," chief executive officer Zhengrong Shi said in an interview. Suntech has contracts for its entire 2007 output and is taking orders for 2008, he said.

The company said the gross margin narrowed to 19 percent from 30 percent as it was forced pay higher prices for silicon on spot markets than under long-term contracts and had higher-cost production in Japan from its acquisition of MSK Corp. in August. The production was shut down in the first quarter.

Suntech's American depositary receipts fell 29 cents to $34.97 at 1:11 p.m. in New York Stock Exchange composite trading. The ADRs, each of which represents one ordinary share, have more than doubled in value since the initial public offering at $15 in December 2005.