In  Solar

Tier 1 vs Tier 2 Solar Panels

By [email protected] | July 16, 2021

If you’re investing in solar panels, you want to pick a product that is built to last for 30+ years.  You want reliable panels that you don’t have to worry about or replace with warranties just in case anything happens. You want efficient panels that will churn out as much electricity as possible.

Throughout your research, you may hear solar panel manufacturers referred to as being Tier 1, Tier 2, or maybe Tier 3. You may read that Tier 1 panels are superior, but that isn’t always the case. Using tiers as a way to describe the quality of panels has become somewhat misused in the solar energy industry.

What is Meant by Tier 1 Solar Panels?

he most prominent tiered system for solar manufacturers is by the Bloomberg New Energy Finance Corporation (BNEF). BNEF came up with this tiered rating to communicate the bankability of solar panel manufacturers. Tier 1 solar panels are described as “those which have provided products to six different projects which have been financed non-recourse by six different (non-development) banks in the past two years.” These are large, utility-scale projects sized at 1.5 megawatts (MW) and up. In addition to this, manufacturers must own their production facilities and sell under their own brand to be considered Tier 1. 

The tiered system does not specifically designate how robust warranties are, how efficient the modules are, or even how long they tend to last. In fact, it does not have much to say about the panels themselves at all. It is more a measure of the manufacturer of those panels – a marker of how many banks have decided to invest in projects with the panel they produce.

But there is still value in this designation for solar owners. Banks want to invest their money wisely and in reliable products made by companies that will be around to honour their warranties. All solar owners want that. If a manufacturer achieves Tier 1 designation, that means at least six different banks have deemed them reliable enough to invest a big chunk of money into. 

If you opt for a solar panel manufacturer in Tier 1, that doesn’t mean those solar panels are necessarily the highest quality or the best panels out there. It means there have been a significant amount of financial institutions that feel comfortable enough with the manufacturer to buy their panels. If you opt for a solar panel in Tier 2, that doesn’t mean that they’re not high quality, but there have not been enough banks to invest in projects with their panels. 

Tier 1 Solar Vs Tier 2 Solar Panels

BNEF only publishes a Tier 1 list on which a very small percentage of module manufacturers are listed. However, in your research, you’re likely to come across manufacturers that are classified as either tier 2 or tier 3 manufacturers. There is no BNEF-official way to classify Tier 2 and Tier 3 panels.

When comparing panel manufacturers, you’ll notice that Tier 1 companies tend to charge a premium for their panels. Is it worth the extra money? There is value in knowing that a PV module manufacturer has earned the trust of several banks. They’re seen as a financially solid and trustworthy company who should be around in a few decades. However, there have been instances where Tier 1 manufacturers have had quality issues or even went bankrupt.

Smaller start-up solar manufacturers may have a fantastic, innovative new product, but because they have not yet become entrenched enough in the solar energy industry to have provided panels for six large-scale projects, they will not be considered Tier 1, regardless of their quality or technology. 

All in all, the manufacturer’s tier ranking should be one of several factors you consider when choosing solar panels.

Have a look at some of our Tier 1 and Tier 2 solar panels on our stock:

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