What is the solar panel tiering system and why it’s important

Published: 6 November 2018

The solar panel tiering system is designed to help you choose a solar panel manufacturer that you can trust that makes reliable solar panels.

How do you choose a solar panel brand?

There are dozens of solar panels on the market and when you have to decide which brand to select for your roof, balancing between costs and quality can be a hard decision. That’s where the solar panel tiered ranking system can help.

The tiered system is designed to help you understand which manufacturers you can trust in terms of performance and quality of the solar panels made by any specific PV manufacturer.

It is especially helpful for larger scale projects. Imagine that you have to install thousands of solar panels in a utility or commercial system, meaning an investment worth millions of dollars. You need to minimise investment risks and try to maximise the return of investment.

The tiered ranking system is conducted by an independent financial entity to certify that a specific brand has the highest probability of producing a higher return on investment.

Solar panel manufacturers are ranked into three categories, they are classified according to their bankability and financing risk estimations. A few organisations establish their own tiering ranking system, however, the most well-known and reliable in the industry is the Bloomberg Tier list.

The solar panel tiering system

According to the financial entity that publishes the Tier list, different categories and parameters are considered. 

For example, Bloomberg New Energy Finance only publishes a single Tier list, offering the top manufacturers in the world. On the other hand, other entities like Navigant Research (formerly Pike Research) publish three categories based on these factors: 

Tier 1

Large-scale manufacturer with over 5 years of experience, with investments on R&D and with a vertically integrated structure that goes from solar cell production to solar panel distribution.

Tier 2

Few investments on R&D along with non-updated facilities and between 2-5 years of solar panel production.

Tier 3

Does not manufacture solar cells, instead, assembles solar panels. Has no investment in R&D and has been assembling solar panels for 1-2 years.

On the other hand, Bloomberg establishes other criteria to include a manufacturer in the Tier 1 list:

  • The manufacturer needs to be vertically integrated, owning production facilities and a brand name 
  • Has more than 6 projects of over 1.5 MW offered with non-recourse debt financing (basically the bank assumes the risk of modules failing and will not be paid by the developer) by 6 different banks in the past two years 
  • Will the company operate over the entire lifetime of the PV system (typically 25 years) to claim for warranty?
  • The company cannot have filed for bankruptcy or insolvency.

Why is the tiered ranking system important?

Here in Australia, it is typical to hear your solar installer selling you a solar panel and claiming that the brand is on the Tier 1 list. It is hard for any solar installer to gain access to the Tier 1 list (from Bloomberg at least) due to the high cost of it (some tens of thousands of dollars).

Therefore, there is actually no way that you can tell for sure if the manufacturer that made those panels  your solar installer sells is actually on the list or not, unless of course the solar installer obtains the list directly or by a third party and shows it to you. 

Keep in mind that the more recent the list, the surer you can be that the manufacturer is guaranteed by Bloomberg, since financial parameters of each company change yearly.

So, if you are installing a small residential or commercial system, it is probably not a good idea to base your decision on finding this list, there are other ways (see below).

But if you are installing a huge commercial or utility system, then obtaining the list might be useful since it will almost ensure you select a top quality brand that will probably obtain funding from respectable banks. That is a big plus when you consider that these projects typically rank in the millions of dollars.

How can I select solar panel manufacturers then?

There are other lists besides Bloomberg’s like the Pike Research (now part of Navigant Research), Thomson Reuters or the Solar Index from OhmHome, which for the purposes of residential solar can give you a good idea of the best brands on the market.

Conclusion

The tiering ranking list is a strategic way to choose between available solar manufacturers to reduce the chances of choosing a bad quality solar panel brand. It is important to note that these lists do not refer directly to quality, but indirectly. Stability, bankability, and projection of the manufacturer are all considered good signs of a manufacturer that can be trusted to offer good quality solar panels. 

One very important thing that does not appear on any list, is that you must make sure the manufacturer has facilities in Australia. This will ensure the warranty is much easier and faster to claim, should it be necessary to do so.

For more information about solar panels, visit our product page.

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