What are Tier 1 solar panels?

Ranking criteria for Tier 1 panels

Tier 1 panels are not selected based on their performance; the categorisation relates to bankability only. Bloomberg explains the key criteria for classifying tier 1 panels is “whether projects using the manufacturer’s solar products are likely to be offered non-recourse debt financing by banks”. Specifically, it means that the panels have been installed in six or more large-scale projects that have received non-recourse financial funding from six or more different banks.

The problem with Tier 1 panels

For household consumers, there are two major problems with Tier 1 solar panels:

• 1. The Tier 1 categorisation does not factor in panel performance
• 2. The list is not made public, so you have no way of knowing what if a module is a genuine Tier 1 panel

The Tier 1 classification does not necessarily help you select the best quality solar panels. If anything, it further confuses the exercise of comparing the various solar panel brands. As Bloomberg points out “a Tier 1 categorisation is not a recommendation for the company or its products.”. The use of the term Tier 1 panels is most problematic when a salesperson uses it to describe the system they are proposing to install. You have no way of telling whether or not the modules are genuine Tier 1 panels. Even if you are sure they are Tier 1 panels, is this classification relevant for your solar power installation?

Tier 1 panels are generally high quality

Tier 1 panels are typically high-quality panels. Despite what may appear to be an irrelevant method for assessing solar panels, the crux of the Tier 1 classification is that banks are only likely to fund large-scale installations if they believe the solar panels are of high quality and will perform as they should for their projected 25-year lifespan.

Tier 1 panels are manufactured in-house

Bloomberg’s assessment criteria for Tier 1 panels stipulates that the modules must be manufactured in-house by the solar companies. Many solar companies outsource the manufacture of their panels. Manufacturing in-house leads to better quality control measures and is likely to lead to an increase in research and development investment.

Questions to ask a salesperson

If a salesperson does claim that they are proposing to sell you a system that uses Tier 1 panels, here are some questions that you can ask to seek clarity on the quality of the panel:

• Can you provide documentary proof that the panels are Tier 1?
• Does the panel brand have a physical presence in Australia?
• What is the solar panel product warranty?
• What is the performance ratio after 25-years?