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An agreement between two Arizona solar companies comes just in time for consumers to take advantage of an expanded federal tax credit that took effect Thursday.

The agreement, between Solon Corp. of Tucson and American Solar Electric Inc. of Scottsdale, will make Tucson-made photovoltaic module systems available to state residents, through an Arizona installer.

Solon Corp., a wholly owned U.S. subsidiary of German solar-module manufacturer Solon SE, will make the modules in its plant at 6950 S. Country Club Road, which opened in October and employs around 130 people. This move is Solon's first step into the residential solar market. Previously, the company focused on the commercial market.

The new agreement, announced Wednesday, means locally available solar panels are made in Arizona, not overseas, and the design and installation of the panels will be done by an Arizona-based company, creating local jobs and keeping money in-state, said Rob Wanless, business development manager for Solon.

American Solar Electric Inc. will initially receive around 1.5 megawatts worth of Solon's solar panels to design and install on residential homes. The company has already installed more than 5 megawatts of photovoltaic solar power to commercial, industrial and residential customers in Arizona.

The agreement will provide enough solar panels to furnish around 375 average-sized homes and offset carbon sequestered by nearly 50,000 trees, a joint company statement said. Also, plans are in the works for a Tucson satellite office of American Solar Electric to open in mid- to late 2009.

Solar power is one of only a few growth industries these days.

American Solar Electric is reporting a boom in business over the prior reporting year's numbers, said Krystal Book, the company's marketing manager.

"Solar is the one bright light in a gloomy economy," Book said.

The solar industry will create 440,000 jobs and will receive $230 billion in new investment by 2016 because of the eight-year extension of the solar-investment tax credit, a study from Navigant Consulting shows. The same report said the extension will triple U.S. solar energy production from 9,000 to 28,000 gigawatts by 2016.

The extension and expansion of federal tax credits for solar was included in last year's financial bailout legislation.

Beginning Thursday, homeowners can qualify for a federal tax credit that equals 30 percent of a photovoltaic system's cost. The previous tax plan had a cap at $2,000 for new solar panels.

Tucson Electric Power also gives a rebate of up to $3 per watt for new systems. American Solar Electric will reduce the upfront price for a system at the time of purchase and collect the rebate as it comes, Book said.

This means that a typical 4.62 kilowatt system that takes 90 to 120 days to install and costs around $34,000 will wind up costing $10,000, Book said.

Arizona Corporation Commissioner Kris Mayes, a frequent supporter of renewable-energy proposals, was excited to see an Arizona location of an international company selling solar products in the state.

"I hope this is the first example in a long line of solar companies locating and selling here," Mayes said.