The Truth About Tier 1 Solar Modules
Updated: Dec 18, 2020
The Bloomberg New Energy Finance (NEF) Tier 1 list has become a popular way to judge which solar panels are the best on the market. This exclusive list is published once per quarter and it’s supposed to represent the top manufacturers in the industry.... or is it?
According to the BloombergNEF PV Module Tier 1 List Methodology, “BloombergNEF has developed a tiering system for PV module makers based on bankability, to create a transparent differentiation between hundreds of solar modules on the market.”
At first glance the tier 1 list seems reliable and a great way to pick the “best” PV modules. But, while this list has become a big part of solar industry, does it really represent “the best of the best?”
Despite the industry obsession with tier 1 status when you take a closer look it’s really not all that it’s cracked up to be.
The Problem with Tier 1 Rating
Tier 1 Isn’t a Measure of Quality
The tier 1 list is not actually meant to be a measure of quality. In fact, Bloomberg states this clearly so that no one, not even banks, use the list as a way to determine quality. “We strongly recommend that module purchases and banks do not use this list as a measure of quality, but instead consult a technical due diligence firm...”
The truth is that in order to determine quality Bloomberg instead recommends consulting with a firm that can help you determine the quality of PV modules. Firms such as:
Black & Veatch
Clean Energy Associates
These firms can help determine quality by considering the facility and the brand. Unlike Bloomberg, they can provide an informed opinion on quality.
Tier 1 Isn’t a Measure of Financial Stability
Despite the fact that the tier 1 list is based on bankability, it has nothing to do with financial stability. When you choose a solar supplier you want a company that you can keep going back to for more inventory. Unfortunately if a solar company goes bankrupt, you’re out of luck.
Bloomberg even warns that there’s no guarantee when it comes to tier 1 companies. “This classification is purely a measure of industry acceptance, and there are many documented examples of quality issues or bankruptcy of tier 1 manufacturers.”
No matter which manufacturer you work with it’s important to do your homework! Even if they’re tier 1 they could still go under which could leave you in a bind.
Tier 1 Isn’t a Meant as a Recommendation
Last but not least, it’s important to know that Tier 1 is not meant as a recommendation. While it might seem counterintuitive, Bloomberg goes out of their way to drive home this point.
“Note that a tier 1 categorization is not a recommendation for the company or its products.”
In fact Bloomberg doesn’t even recommend that manufacturers try to get on the tier 1 list. “Since tier 1 ranking is not a recommendation, we advise manufacturers against spending much energy pursuing it.”
So if tier 1 says nothing about quality, financial stability and it’s not even a recommendation, what’s the point? “Industry acceptance” sounds a lot like a popularity contest that not worth competing in.
There has been way too much focus placed on this rating and that means that many other high-quality solar panels are getting passed over because people don't understand what a tier 1 rating even means.
Finding the Right Panels for You
So if tier 1 isn’t worth the paper it’s written on, how do you find the right solar panels for you? Well you should do exactly what Bloomberg recommends: do your own research!
There are many consulting firms that can help you determine the quality of panels if that’s what you’re worried about. If you’re worried about getting left out in the cold by your solar supplier, make sure that you diversify your inventory.
Another way to consider which panels are best is to see where they’re made and where they’re coming from. Call us biased but we think American made is best!
At Next Energy we have our solar panels manufactured in California. We’re able to keep a close eye on making sure that our panels are made to the highest standards! We also offer a warranty that can’t be beat.
Stop pigeon-holing yourself to tier 1 panels and start exploring solar panels that have the quality, reliability and price that you’re looking for!