Long story short:
- ‘Tier 1’ is one of the most misused and misleading terms in the solar industry. To be quite blunt, Tier 1 is a marketing term a lot of cheap solar installers exploit to give the buyer a feeling of confidence in a substandard product.
- The tiering system was created by BloombergNEF & has nothing to do with the quality of the solar panels.
- It was created to separate solar manufacturers (NOT the panels) based on their ‘bankability’, which BloombergNEF defines as ‘whether projects using the solar products are likely to be offered non-recourse debt financing by banks’.
- The tiering system can be a good place to start your research, but it should not be used to compare and evaluate the quality, longevity or performance of solar panels.
Read on for more information.
THE TIER SYSTEM – What does ‘Tier 1’ even mean?
Tier 1 is a label given to solar panel manufacturers. In the solar industry, there is a common misconception that panels that are made by Tier 1 manufacturers are of higher quality and that quite simply, isn’t always true.
BloombergNEF very clearly states,“We strongly recommend that module purchasers and banks do not use this list as a measure of quality…This classification is purely a measure of industry acceptance, and there are many documented examples of quality issues or bankruptcy of tier 1 manufacturers” (BloombergNEF, 2019).
To be classified as a Tier 1 manufacturer, they must: “provide own-brand, own-manufacture products to six different projects, which have been financed non-recourse by six different (non-development) banks, in the past two years.” It does not take into consideration components, production or the end quality of the solar panels. It is merely a status that reflects the manufacturer’s acceptance in the industry, based on their financial background, investments in research, development of new technologies, and manufacturing capacity.
What about Tier 2 and 3?
BloombergNEF does not publish a Tier 2 or 3 panel manufacturer list. There is only an official Tier 1 list and therefore, there can only be Tier 1 panels. Please be mindful of this when doing your solar panel research.
Where did the tiering system come from?
The tiering system was first created by BloombergNEF, a finance company, to rank solar panel manufacturers.
BloombergNEF reviews the Tier 1 list quarterly and any company can be removed from the list at any time.
To get access to the official BloombergNEF Tier 1 list, you must email them, (email@example.com) to get a ‘subscription quote’ to access it. Some less than reputable marketers rely on the fact that the public can’t easily check the list… That is why such companies claim that their panels are Tier 1 when in fact they aren’t.
What you should look for when choosing solar panels
Highest efficiency, not the biggest wattage
The higher the efficiency of the panels, the more watts of electricity the panel will produce, per square meter of panel. This means that the higher the efficiency, the less roof space required (lower footprint). If you don’t have a lot of room to work with, investing in high-efficiency panels is the way to go.
Other important things to keep in mind:
- Higher efficiency panels are typically more expensive.
- Really high wattage solar panels are usually physically much larger. So, even though the panels are higher wattage, you might not be able to fit as many on your roof and you could end up with a system that’s smaller than needed.
Solar panels have two different types of warranties: The Output Performance Warranty and the Manufacturer’s Product Warranty. They are very different!
- Performance warranty: Every panel that is on the Australian Clean Energy Council (CEC) list of approved panels must have at least a 25 year, 80% output performance warranty. The 25-year output performance warranty is very standard amongst the hundreds of different panel manufacturers. In other words, a 25-year performance warranty is nothing special. All solar panels, both good and not-so-good, have this warranty.
- Product warranty: The product warranty covers physical defects of manufacture including delamination, reduction in insulation resistance, frames falling off etc. The manufacturer’s product warranty is much more meaningful, important, and useful than the performance warranty. The panel manufacturer’s product warranty is VERY different between the various manufacturers. Some panels have 10 years, some have 12, others 15 and the industry leaders have 25 years’ manufacturer’s product warranty. The wording and conditions of the manufacturer’s warranty will also vary greatly, so be sure to read the fine print and terms and conditions.
Local, Australian Support
Does the solar manufacturer have an Australian office that you can easily contact? Like most things, having an Australian office makes things infinitely easier in terms of processing warranty claims if something was to go wrong.
You also need to think about:
- Will the installer be around to honour the warranty if something were to happen?
- How long has the manufacturer been producing panels? What is their reputation in the solar industry?
While the choice of the panel is important, we do NOT recommend making a decision based on the brand of the solar panel alone. There are many other factors that need to be taken into account: the brand and type of inverter, the experience and reputation of the installer, and quality of workmanship.
By their own admission, Bloomberg recommend “module purchasers and banks do not use this list as a measure of quality” and we wholeheartedly agree – you should not use BloombergNEFs tiering system as a measure of solar panel quality. Just because they are a Tier 1 manufacturer, does not mean that their solar panels are going to: perform better, last longer or be more efficient. There has been countless documented ‘Tier 1 panels’ that have had, or a combination of micro-cracks, ingress, delamination and deformation. Instead, opt for panels that have a high product warranty, high efficiency and are backed locally.
If you would like some more information, check out this article from LG Energy – What is a Tier 1 solar system, and is it important?