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Tier 1 solar panels. Does it mean they’re any good?

Tier 1 solar panels. Does it mean they’re any good?

Did you know that there are 5,465 solar panel brands from 99 solar manufacturers on the Australian Clean Energy Council approved solar panels list?

We are spoilt for choice in Australia when it comes to solar panels. Whilst choice is a generally a good thing, the downside is that too much choice can be confusing!

How do you know what’s a good solar panel?  How do you sort out the wheat from the chaff?

At Solar Run, we’ve done the research into the best solar panels – and we’re ready to help you get the best solar panels for your home.

This article takes a close look at a term that’s bandied around a lot in the solar industry – Tier 1 solar panels.  A lot of solar retailers claim that they are selling Tier 1 solar panels. It sounds good but are really Tier 1 panels?  And does it even matter?

This article explains what the Tier 1 solar panels rating means and how it is useful when evaluating solar panels.  It covers:

  • What is a Tier 1 solar panel?
  • How many Tier 1 solar panel manufacturers are there?
  • How does the Tier 1 solar panel ranking help me?
  • Should I buy a Tier 1 solar panel?

What is a Tier 1 solar panel?

The Tier 1 solar panel ranking created by Bloomberg New Energy Finance Corporation is what most solar companies refer to when they say a solar panel is ‘Tier 1’.

The Bloomberg Tier 1 ranking is used to rate solar panel manufacturers by their financial stability or – as they call it – their ‘bank-ability’.

Yes, that’s right, the Tier 1 ranking is a measure of the financial strength of solar panel manufacturers – nothing more, nothing less!  It is not a measure of panel quality.

Even Bloomberg makes a point of this saying:

  • “We strongly recommend that module [i.e. solar panel] purchasers and banks do not use this list as a measure of quality.”

So, what does the Bloomberg Tier 1 ranking mean?

  • Bloomberg defines Tier 1 solar manufacturers as “those which have provided own-brand, own-manufacture products to at least six different projects which have been financed non-recourse by six different commercial banks in the last two years.”

They also state that

  • “We only tier manufacturers which actually own their own production facilities and sell under their own brands. Companies that outsource production under brand names are not tiered.”
  • “Manufacturers which have filed for bankruptcy or a form of insolvency protection … are removed from the tier 1 list until further notice.”

How many Tier 1 solar panel manufacturers are there?

There are around 35 solar panel manufacturers on the Bloomberg Tier 1 list.

To put that number in context, there are more than 350 solar panel manufacturers worldwide. This means that Bloomberg lists the world’s top 10 per cent solar PV manufacturers (give or take) based on financial stability.

The Bloomberg Tier 1 list is updated every quarter so the number of solar panel manufacturers can vary, with new ones coming on board and others dropping off.

It’s important to know that the Bloomberg Tier 1 rating is only available on subscription; it is not published publicly on the internet.  If you do see a Bloomberg Tier 1 solar panels list on the internet, question its reliability – and ask to see the original Bloomberg report.

How does the Tier 1 solar panel ranking help me?

Whilst the Bloomberg Tier 1 ranking doesn’t help you judge the quality of a solar panel brand, it does help in other ways.

Basically, it’s an indicator as to whether the solar manufacturer is going to be around to honour its warranties.

The thing is, with solar panels you aren’t just buying a panel – you’re also buying a 25-year performance warranty.  That’s why you want to be confident – or as confident as you can be – that the manufacturer behind the warranty will still be in business over the mid to long term in case you need to claim on the warranty.

And this is exactly where the Tier 1 ranking is useful!

The Tier 1 ranking provides an indication as to whether the solar panel manufacturer has the financial strength to weather the ups and downs of the solar industry. Most importantly, it gives you – the buyer – some degree of confidence that the solar panel company will be able to support you in the event of a warranty claim at some point down the track.

How does the Tier 1 ranking tell us that?

  1. Financial strength

Bloomberg tracks thousands of megawatt solar farm deals to evaluate how they are financed.  They also check that the solar panel manufacturer hasn’t gone bankrupt or filed for insolvency. This provides an important indicator that the solar module manufacturer is financially viable as evaluated by commercial banks who will no doubt have had a good close look at their books!

With solar panel manufacturers entering and exiting the market all the time, it’s important to be confident that the company you’re buying your panels from is financially solvent and big enough to last the distance.

Size and economies of scale are important in solar panel manufacturing.  It’s a low margin business and extremely competitive.  That’s why the biggest solar panel manufacturers are generally the safest bets – and certainly the ones that figure most prominently on the Bloomberg Tier 1 solar panels list.

  1. Own manufacturing facilities

Many so-called solar panel manufacturers are just assemblers. There are literally hundreds of solar panel assemblers who are not vertically integrated and don’t manufacturer the various components that comprise a solar panel.

Tier 1 solar panel manufacturers, on the other hand, don’t outsource production. They are more likely to have their own factories, invest in R&D, and have strict quality control processes. That means Tier 1 panels are likely to be more reliable and generate more electricity over their 25-year lifetime than non-Tier 1 panels.

  1. Market under their own brand

Tier 1 manufacturers market their panels under their own brand and invest in their brand.  That’s a fair indicator that they will be keen to maintain their brand reputation. Compared to no-name solar manufacturers, Tier 1 solar panel manufacturers are likely to be more quality focussed as any shortfall in panel quality will damage their brand.

  1. Selected for 1.5MW-plus solar farms

Whilst the purchasing criteria for panels for mega-scale solar farms is likely to be somewhat different from that of residential solar customers, it is a reasonable indication of the reliability of the panel. What solar farm investor would want a solar panel brand that wasn’t going to generate the required power over the 25-year life of the solar farm?

Should I buy a Tier 1 solar panel?

In our view, the answer is YES!  Tier 1 ranking is a good way of identifying financially reliable solar panel manufacturers.

It’s the first thing to check when you are looking for solar panels, assuming you want to purchase panels from a solar company that’s likely to be around to honour the warranties!

But Tier 1 ranking is just a starting point. There are other important criteria you need to check when it comes to the performance of the solar panels.  For example, Tier 1 doesn’t tell you how efficient the solar panels are at converting sunlight to electricity, neither does it what power output you can expect from the panels at the end of the 25 years.

Solar Run only sell the best Tier 1 solar panels

At Solar Run, we only supply the best Tier 1 solar panels based on lifetime power output, efficiency and reliability including household brands like LG, SunPower, Jinko, Trina and Risen

What’s more, we encourage our customers to purchase solar panels from a manufacturer that’s got a solid presence in Australia.  By that, we mean an Australian office staffed with a tech support team who are both phone-based and in the field.  No international numbers to dial, Australian only!

Buying from a solar manufacturer with a genuine Australian office gives you protection under Australian Consumer Law in the case of a faulty product or underperformance.

In our opinion, it’s not worth settling for less!

If you’d like to find out what panels we’d recommend for your property, give us a call on 13 000 765 27 or fill in our enquiry form.

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