Solar firm SunPower Corp. said Monday it signed a deal with Jabil Circuit to manufacture solar panels in Mexico for the North American market.

The manufacturing will begin in the second half of 2009 and no financial terms or capacity production details were disclosed.

This agreement is the first step in SunPower's long-term strategy to implement regional panel assembly for improved customer service and reduced costs. The company is also continuing to evaluate establishing localized manufacturing facilities in large solar markets in the U.S., SunPower said in a statement today.

San Jose, Calif- based SunPower is the market leader in North America. The firm and other solar companies have been hit by the credit crisis as companies struggle to finance projects. In April, the company reported an unexpected net loss of $2.5 million for the first quarter.

Executives in the solar industry have said there are signs that the solar market in the U.S. will recover but they remain cautious about the second half of this year, according to a report by Reuters from the news agency's Global Energy summit last week.