What Are Tier 1 Solar Panels? | Here’s Why They Matter

So you’re looking for a module with quality, efficiency, and durability that punches above its price. This led you to tier 1 solar panels but, truthfully, it’s likely not what you think it is.

Rather than being superior to every other solar panel, earning the “tier 1” moniker says more about the manufacturer than the module.

But make no mistake, these manufacturers need to meet a certain set of criteria that, among others, includes financial stability and a track record of producing reliable solar panels.

So, choosing them over others has a myriad of benefits.

But, that just opens a whole new can of worms for you, doesn’t it? To help clear things up, I’m going to walk you through all you need to know about them. Here’s what I’m covering:

• The definition of tier 1 solar panels
• The criteria for tier 1 categorization
• The benefits of choosing tier 1 manufacturers
• Why you shouldn’t choose Tier 1
• Tier 1 VS. Tier 2 Vs. Tier 3
• Tier 1 manufacturers that we recommend
• Are non-tier 1 manufacturers bad?

Defining tier 1 solar panels

At its core, the term “tier 1” refers to a solar panel manufacturer’s bankability. Now, there are a couple of ways this can be looked at.

The technical meaning is tier 1 solar panel manufacturers are those that have businesses that are so healthy that lenders want to offer them loans.

The other way to look at it, though, is from a consumer’s standpoint. Tier 1 solar panel manufacturers are those that are more likely to uphold their warranties because, well… they aren’t likely to go bankrupt.

There are tier 2 and tier 3 categories as well. Also, this categorization was coined by Bloomberg New Energy Finance (BloombergNEF).*

How does a solar panel manufacturer become tier 1?

According to BloombergNEF, manufacturers have to pass the following criteria in the past 2 years to be classified as tier 1:

• Solar panel manufacturers must have their own brands and produce their own products.
• These manufacturers must supply said products to six different projects.
• These projects must be non-recourse financed (loans).
• These loans must be from six different commercial banks.

This information needs to be in Bloomberg’s database, too. So, if Bloomberg can’t track the information it needs, the manufacturer is taken off the tier 1 list.

Moreover, if a manufacturer files for bankruptcy or any form of insolvency protection, they’re taken off the list of tier 1 solar panels as well.

Are there benefits to choosing tier 1 solar panels?

Oh, most definitely – and it all circles back to the criteria that solar panel manufacturers had to go through to earn their tier 1 title.

For further reading: 12 benefits of using solar panels

Tier 1 solar panels are generally more efficient.

The fact that tier 1 manufacturers produce their solar panels also means that they’re in control of the entire process. From choosing the materials, manufacturing the solar cells, and down to assembly.

The result is that they typically end up with top-quality solar panels with better efficiencies. For you, this just means that you will likely have a solar system that pumps out more solar energy.

Tier 1 solar panels are generally more durable.

Again, because tier 1 manufacturers control the entire production line, they also tend to end up with solar panels that last longer.

Also due to this vertically integrated process, tier 1 solar panels will at least have the standard 25-year warranty. Some even claim to last longer.

And, since a tier 1 manufacturer is also a financially stable business, it’s going to honor the standard 25-year warranty for solar panels.

Recommended: The complete guide to insurance and warranties for solar panels

Is there a reason why I shouldn’t choose tier 1 solar panels?

Yes, there are certain situations where it might not be the best idea to choose tier 1 solar panels. Ultimately, though, it all comes down to your budget and how invested you want to be.

“Why?”

Good question.

Tier 1 solar panels generally cost more upfront.

The higher quality and better durability come from better raw materials and a more controlled manufacturing process. All that comes at a cost to the manufacturer which, ultimately, trickles down to us consumers.

So, while I generally recommend you get the highest quality solar panels available, you don’t always have to.

Remember, this tiered classification says more about the manufacturer rather than the solar panels. If you can find tier 2 (perhaps even tier 3) solar panels that give you excellent value for your money, those are great options, too.

This brings us to the next topic.

How are tier 2 and 3 solar panels different from tier 1?

In a nutshell, their differences all revolve around the same criteria.

Tier 1 solar panel manufacturers simply have more control of their manufacturing process than their tier 2 and 3 counterparts. Meaning, they generally also have more reliable, efficient, and durable modules. They’re also more financially stable and have better track records.

For your reference, though, here’s a summary of their differences:

Tier 1:

• The most vertically integrated manufacturing process (makes their own solar panels, from processing silicon ingots all the way to assembly).
• Only 2% of solar panel manufacturers.
• Large companies.
• Most expensive.

Tier 2:

• Somewhat vertically integrated manufacturing process (typically buys solar cells from tier 1 manufacturers).
• Small to medium-sized companies
• Moderately pricey.

Tier 3:

• Least vertically integrated manufacturing process.
• New companies.
• Most affordable.

Our most recommended tier 1 solar panel manufacturers:

1. SunPower
2. Jinko
3. QCells
4. Canadian Solar
5. Risen Energy

It’s worth noting that there are dozens more tier 1 manufacturers on BNEF’s list. These are just the top 5 that we recommend most to Australians because of their availability and quality. 

Also, another thing worth noting is that manufacturers can fall in and out of BNEF’s tier 1 list as it’s reassessed every quarter. REC and Longi, for example, fell off the list in Q4 of 2022. 

This brings us to the next issue. 

When a manufacturer isn’t on the Tier 1 list, does that mean their solar panels are bad? 

No, not necessarily. 

REC, for example, makes some of the best solar panels in the world. Their modules are right up there with Canadian Solar and SunPower in terms of efficiency, power output, and durability. 

Not to mention, Tesla isn’t on the tier 1 list either and they’re regarded as one of the best innovators and module manufacturers in the world. 

So, when a manufacturer isn’t on the tier 1 list, it only means that their bankability isn’t up to Bloomberg’s criteria; not that they make bad solar panels. 

Conclusion

In summary, tier solar panels aren’t actually a thing. Rather, the term “tier 1” refers to manufacturers of solar modules that, by BloombergNEF’s standards, are the most bankable solar companies. 

There are other solar panel tiers, too (tier 2 solar panels, tier 3 solar panels). The higher the tier, the more vertically integrated the manufacturing process and the more stable they are financially. 

Generally speaking, the first tier also makes some of the best solar panels around but they come at steeper prices. There are exceptions, though. Tesla and REC, for example, aren’t categorized as tier 1 but they’re 2 of the most renowned solar companies worldwide. 

In the end, the choice of what solar panels you want for your home is yours. Each manufacturer has its pros and cons after all. But, if you need help choosing, we have a network of pre-vetted solar installers that’s ready to get you 3 FREE quotes right away. 

Resources:

• https://data.bloomberglp.com/professional/sites/24/BNEF-PV-Module-Tier-1-List-Methodology.pdf