Pros and cons of Tier 1 vs. Tier 2 solar panels
Updated
Image source: Sciencemag.com
When you buy a solar panel, you are effectively getting two things; a physical product that produces solar electricity, and a promise from the manufacturer that this product will continue to produce power for its warranted life of about 25 years.
The questions you have to ask yourself are:
- What brand of solar panel do you expect will last the longest, and which panel will produce more power for longer than an alternate panel? (You can learn more about that here.)
- Most importantly, if there is a problem with your panels over that 25-year lifespan, what is the chance that the manufacturer will honor their warranty?
One of the things the industry has come up with to try and answer these questions is a tiering classification system for solar panel manufacturers.
Generally speaking, Tier 1 solar module manufacturers are defined as those that:
- Have been producing solar panels for 5 years or more
- Are either publicly listed on a stock exchange or have a strong and stable balance sheet
- Have fully-automated production and a high degree of vertical integration
- Invest significantly in marketing their brand
- Have a highly regarded reputation within the industry for quality and service
Tier 2 and Tier 3 manufacturers encompass those that do not meet one or more of the above criteria.
Because Tier 1 solar panels are built with higher standards (in order to last longer and produce abundant solar power), they are typically 10-30% more expensive than Tier 2 and Tier 3 solar panels. Examples of Tier 1 solar panel manufacturers include: SunPower, SolarWorld, Panasonic, LG, Trina, Jinko, and Canadian Solar.
A key factor that differentiates the Tier 1 list from Tier 2 manufacturers is the reliability of the warranties that Tier 1 solar manufacturers offer. You can trust that their 25-year performance warranty will be honored, and importantly, you should choose reputable installers to install your Tier 1 panels.
What sets Tier 1 solar panels apart?
The value equation that Tier 1 manufacturers use to justify their price premium include:
- Their high-quality manufacturing process makes it less likely that there will be defects in their products, so you can expect Tier 1 manufacturers to honor their product warranty.
The SolarReviews view: We think it is generally true that all Tier 1 manufacturers have quality manufacturing processes, but we also think it is true that both Tier 1 and Tier 2 use solar cell production lines and solar module assembly lines that are designed and built by the same engineering firms. With that being said, many second and third-tier manufacturers may also have high-quality automated manufacturing processes.
Bottom line, Tier 1 panels are a great choice but Tier 2 are a little cheaper and can still provide excellent quality.
- Tier 1 PV module manufacturers have invested a lot in building their brand and being able to charge a premium, so they are going to be more careful in the quality control process to avoid defects.
The SolarReviews view: This is probably generally true, but again there may well be second and third-tier solar panel manufacturers that also have excellent quality control.
In my Australian solar installation business, I have imported a small brand of Chinese solar modules from a family-owned Chinese company for about 7 years. I have not yet had a single panel with a defect. Over this same time period, there have been a number of quality-related recalls from Tier 1 manufacturers. I have 30kW of these cheap Chinese panels within a large-scale solar system on my home in Australia and have no issues to report.
- Their corporate strength and quality manufacturing means that if there is ever a quality problem they will fix it.
If a company has invested a large amount of money in promoting their brand, then they are less likely to allow any defective product to damage their brand. Their investment in their brand means that they have an incentive to invest in quality control in their manufacturing and to respond favorably to warranty claims.
The SolarReviews final say: We think it is worthwhile to pay a small price premium, in the range of $.20-$.30 per watt, for premium Tier 1 panels. We can't say for sure that it will make a difference in terms of quality or long-term reliability, and we can't necessarily say any particular Tier 1 vendor will be in business in 10 or 15 years. But we do think these brands will want to protect their reputation and so they will be more likely to respond to warranty claims if they are still in business.
Having a trustworthy installer that is likely to respond to issues with your solar system over its lifetime is more important than choosing Tier 1 panels.
We think a big issue to look at is the amount of assets that a solar panel manufacturer has in America. If a foreign solar panel manufacturer has few assets in America and there is a major quality issue in the future, it is likely they will simply liquidate their American subsidiary.
I have seen this with a different second-tier manufacturer in Australia; when micro fractures were found in a high proportion of their solar panels, they simply packed up and left Australia.
If you use our site to get quotes, we will get you quotes for a number of different options, including both Tier 1 and Tier 2 solar panels. You can then work with the installer you choose to determine if Tier 1 or Tier 2 panels are the best option for your home.
Key takeaways
- Choosing a solar panel means you are picking a product to create electricity for your home. A Tier 1 solar panel company will honor the warranty for the lifetime of the panel.
- Tier 1 solar panels are the most expensive option because of their high quality and reputation.
- Working with a well-reviewed, long-established solar panel installer within the U.S. means there is a higher likelihood that they will help you if issues arise.
Andrew Sendy
Home Solar Journalist
Andy is deeply concerned about climate change but is also concerned about cost of living pressures on American families. He advocates for solar energy and solar battery storage only to the extent that they make financial sense for homeowners. He is not affiliated with any particular solar company in the United States.