What are Tier 1 solar panels?
A Tier 1 solar panel is a panel that has been supplied by a company to at least 6 different large scale projects, each financed by a different bank, within the past 2 years.
The solar tier system was developed by Bloomberg New Energy Finance to set an industry standard for the vast, growing number of solar manufacturers on the market.
This system is based purely based on the manufacturers’ bankability: the willingness of banks to finance solar projects supplied by the manufacturer.
The tier system has no direct relationship to the financial stability of the company or the quality of its products. Essentially it is only a measure of the company’s general industry acceptance and its capacity to supply large solar farms.
“We strongly recommend that module purchasers and banks do not use the Tier 1 list as a measure of quality, but instead consult a technical due diligence firm.”
– Bloomberg New Energy Finance
Are Tier 1 solar panels worth buying?
The Tier 1 rating system has no relation to a panel’s quality, performance, warranty, local customer support, or any other indications that consumers would find useful.
Therefore, it is important to choose a product based on the company’s reputation as well as local service and support. Only manufacturers with long term financial stability and a strong ongoing presence in Australia will be able to provide ongoing service for their solar products.
Why do solar companies advertise their products as Tier 1?
Many cheap solar companies will advertise their panels as Tier 1 in order to give their customers the impression that they are getting good quality solar panels.
In truth, the quality and performance of Tier 1 panels varies greatly from manufacturer to manufacturer.
More often than that cheap Tier 1 solar panels are actually poor quality and performance. Worse yet, they may end up needing repairs or being thrown out after only a few years. If the customer is lucky they’ll be able to claim the repairs under warranty. In many cases the solar company has gone out of business, meaning there is no to service the warranty.
“(Tier 1) classification is purely a measure of industry acceptance and there are many documented examples of bankruptcy of Tier 1 manufacturers.”
– Bloomberg New Energy Finance
The chart below shows just how many companies have exited Australia in the past few years.
Some companies may not even have Tier 1 status but falsely advertise that they are to assure unsuspecting customers.
Since the actual list of Tier 1 solar companies is hidden behind a paywall, most consumers have no way of authenticating a company’s claim. That’s why it’s important to ask companies to show certification of their Tier classification if you’re not sure.
Tier 1 vs tier 2 solar panels
If Tier 1 panels aren’t guaranteed to be good quality then what about Tier 2 panels?
As with Tier 1 panels, once again there is no relation to quality or performance here. In a nutshell Tier 2 panels simply fulfill some but not all of the bankability criteria that Tier 1 manufacturers meet.
Whether it’s a Tier 1 or Tier 2 panel, just remember that this has nothing to do with quality. In fact, this tier system was never intended for the consumer market.
When looking for a good quality solar panel, the most important factor you should consider is the manufacturer’s track record and local presence in Australia. Leave the Tier rating for solar farm investors!
Other factors to consider are:
- Size of the company
- Financial position
- International reputation
- Warranty policy
- Investment in research and development
- Where it’s manufactured
- Degree of vertical integration (i.e. Do they produce everything in-house or do they only focus on the final assembly)
Doing your own research is important, however, we always recommend consulting a solar professional before purchasing your solar system.
More in-depth information on Tier 1 panels and potential defects can be found here.