14 Oct The List of Tier 1 PV Manufacturers explanation and beyond
In the PV module industry, it is commonplace to discuss about different Tier 1 PV manufacturers. In this article, we will explain what the list of Tier 1 manufacturers is, why we should consider this indicator and what other considerations one should consider in choosing high quality, reliable, and technologically advanced PV manufacturers.
What is the Tier 1 manufacturer list?
Tier 1 manufacturers are usually the companies in the quarterly Bloomberg New Energy Finance (BNEF) PV Market Outlook sorted according to their annual module production capacity in MW/year.
The different brands in this list are marked by BNEF as “bankable” meaning they have their own products, factories, and their products were used on Megawatt-size projects. They are also not in the insolvency process and are not facing any other serious financial difficulties. The exact definition from BNEF is following:
“Tier 1 module manufacturers are those which have provided own-brand, own-manufacture products to six different projects, which have been financed non-recourse by six different (non-development) banks, in the past two years.”
These projects must be:
- Larger than 1.5MW
- Location, capacity, developer, bank, module maker must be in the public domain
- Any brand with financial issues such as bankruptcy, insolvency protection or major default on bond payment will be removed from the Tier 1.
- BNEF does not publish a Tier 2 or 3 list
Beyond the Tier 1 list
As shown above, the Tier 1 list is focused on bankability; in other words, the financial aspect of each company. It is an important criterion as banks sometimes refuse to finance projects that are not designed with Tier 1 brands. However, to make sure that Tier 1 companies utilize high quality products with state-of-art technology, we must consider other factors as well.
The technology used for PV modules are improving constantly and rapidly. The power output as well as the efficiency of solar panels is increasing each year. For example, the advanced PERC technology was adopted in production only within a year of its invention, which demonstrates the speed of changes manufacturers must confront. At the solar panel level, a manufacturer with advanced technology can provide a high-quality product certified by reputed certification bodies.
A statistic and prediction of different cell technologies is published in “International Technology Roadmap for Photovoltaic (ITRPV)” by VDMA.
As a manufacturer, production capacity is one of the key values. This indicates not just their ability to satisfy the demand, but also the company’s overall strength. This factor is also taken into consideration in the Tier 1 manufacturer assessment.
A list of top 10 PV module manufacturers is published by the PV-magazine and cited below:
Research & Development
As we discuss technology, R&D is crucial for a manufacturer that strives for a leading position in the industry. A strong R&D department could help to ensure a manufacturer’s high competitiveness in the future.
Some companies with large investments in R&D do not appear in the Tier 1 list such as SunPower or Hanergy due to their unique production of IBC solar panels and thin-film technology.
The graph below from PVTech’s article shows the annual R&D expenditures per manufacturer in 2017.
Strategy and History
Depending on each manufacturer’s advantages, each cited company has a strategy reflected by their technology, R&D focus, and their products. The PV system usually has a long lifetime, therefore before choosing a manufacturer, investors should pay attention to the history of that manufacturer on a worldwide and regional scale.
The price of the solar panel is usually stated in Eur/kWp or $/kWp. This indicator is usually the most commonly used but often one of the most misleading factors. It is easy to impulsively decide to use the panel with the lowest price, but as we discussed above, the price is not the only indicator to consider. A simple example of a system using the Hiku PV module from Canadian Solar could result in lower final costs compared to less expensive, but less efficient products. Indeed, higher efficiency solar panels reduce the total system costs. For more information, read our article “What does LCOE mean ?”.
Service and Support
Finally, service and support are essential factors that an investor or installer should take into account before making a decision. While the performance of solar panels is usually guaranteed for 25 years, the product warranty is usually shorter, starting around 10 or 12 years. The support of the manufacturer is vital and the relationship between the installer, the distributor, and the manufacturer depends on it. An excellent distributor should aid installers with efficient support and timely problem resolution.
The list of Tier 1 PV manufacturers published by BNEF provides a clear outlook at the manufacturer’s bankability. However, to choose a manufacturer wisely, it should include multiple considerations such as technology, production capability, R&D, strategy, history, pricing, service, and support. All these factors help both customers and investors to decide which manufacturer and product should be used for a project.
In Solarity, assessments on each factor were done to make sure our clients receive the best products from the best manufacturers. Solarity has a close relationship with several manufacturers in the PV industry. For more information, see our list of our products.