What is the Tier 1 list and what is its relationship with the quality of the module?

The classification analyzes manufacturers that had products used in projects financed by international banks

This article aims to clarify the meaning of the term Tier 1, usually praised by manufacturers and sellers of photovoltaic modules.

Furthermore, it will show what the relationship of the denomination is Tier 1 with the safety and quality of the photovoltaic project.

There are hundreds of photovoltaic module manufacturing companies in the world, with different production capacities, different levels of investment in research, product quality and financial health.

With the recent rise in the photovoltaic market, mainly in Asian countries such as China and India, the number of module manufacturers has increased considerably.

The need then arises to highlight manufacturers with a good reputation and who honor their financial and commercial commitments. One of these classifications is called Tier 1.

The classification of Tier 1,created by BNEF (BloombergNEF), analyzes manufacturers whose products were used in large projects financed by international banks.

The list Tier 1

For a manufacturer to join the list of Tier 1 it must meet a series of requirements such as:

  • Completely manufacture your own modules, that is, do not add third-party cells to your modules. This ends up selecting manufacturers with more control over their production and quality;
  • Have provided modules for 6 or more projects above 1.5 MW, which have been financed in the last 2 years by non-development banks;
  • Not having filed for bankruptcy or not being insolvent.

Bank financing also needs to be of the type non-recourse (or without recourse), in which the financing bank takes some of the client's assets as collateral for a loan (a property, the photovoltaic project itself, etc.) and cannot charge extra amounts after taking this asset in case of non-payment.

In other words, if the bank makes this loan for a project containing panels from a manufacturer that does not honor its guarantees or has questionable quality, the production of the photovoltaic plant is compromised, the risk of default increases and the risk of the bank losing money even with asset taking also increases.

As this type of loan is risky for the bank, the criteria for internal quality analysis of components and the project are rigorous. However, banks do not publicly disclose the internal criteria adopted for accepting a photovoltaic project.

As it is not certain which criteria were considered, we cannot assume that the list of Tier 1 be a definitive indication of the superior quality of the modules. We can only assume that manufacturers have good bankability, that is, a good probability that projects using its modules will have financing approved.

This bankability shows that the manufacturer is well regarded by banks and is capable of honoring its warranty and supply terms.

The list of Tier 1 then focuses on financial aspects such as: stability, ability to honor guarantees and ability to supply projects. The classification Tier 1 helps the designer or client to select a more reliable manufacturer for their projects, without the seal Tier 1 necessarily have a direct relationship with the quality of the products.

BNEF strongly recommends not using the list Tier 1 as a measure of quality and seek analysis from qualified companies for this purpose, such as DNV GL, TÜV Rheinland, Clean Energy Associates, among others.

Quality and Tier 1

Let's take as an example the qualification company DNV GL cited by Bloomberg NEF. DNV GL is a Norwegian certification and performance and quality analysis company for products from different sectors.

This company produces annual reliability and quality reports on photovoltaic modules using tests defined in the IEC 61625, IEC 61730 and UL 1703 standards, in addition to production audits. The modules that show the least degradation and the best performance in tests receive the seal DNV GL Top Performer.

Figure 1: “X-ray” photographs (electroluminescence test) showing the degradation of a panel throughout the tests applied by DNV GL

The list of module manufacturers with the best performance in tests in 2017 and 2018 is shown below.

It is possible to note that not all manufacturers Tier 1 are on the list of best performing module manufacturers from DNV GL or other certification bodies. A company can satisfy BNEF criteria but, at the same time, not have its products listed in the group of modules with the best performance in tests.

At first glance it is possible to conclude that a photovoltaic module Tier 1it is of good quality – as no bank would lend money to a project with bad modules – and the supplier is able to honor its warranty and supply terms.

However, not necessarily a product Tier 1 is the best, reinforcing BNEF's own guidance: the classification Tier 1 should not be used as a certificate of quality for photovoltaic modules.

Some manufacturers of photovoltaic modules with significant productions, such as BYD, Jinko and Trina, appear on both lists, showing that the manufacturer has good bankability, being able to honor its guarantees, in addition to simultaneously producing modules of superior quality.

Conclusion

It is concluded that the list Tier 1 points to a certain quality and reliability of the modules, as no bank would finance a project with bad products, demonstrating that the manufacturer has a good warranty policy and has a large supply capacity.

However, not necessarily a product listed as Tier 1 has superior quality. The classification Tier 1 it mainly encompasses aspects of the company's financial health and does not technically evaluate the quality of the products. The quality of photovoltaic modules is verified through tests and evaluations by certifying companies such as those exemplified previously.

The installer, designer and customer of photovoltaic systems must be careful to select high quality modules, such as products tested and certified by the companies mentioned in the text, and preferably modules whose manufacturer has a good warranty and supply reputation.


Picture of Mateus Vinturini
Matthew Vinturini
Specialist in photovoltaic systems and electrical engineer graduated from UNICAMP (State University of Campinas). Science and technology enthusiast, with experience in the field of solar energy, both commercially and in the design, dimensioning and installation of photovoltaic systems. 

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