Why is it so important to use the best solar panel brands?

A recurring point we make on SolarReviews is that solar panels last a long, long time; 25-30 years to be exact. This makes it important to buy solar panels with the following qualities:

• They are the least likely to fail.

• The manufacturer will honor their warranty if there is a fault.
• Installed by a local solar company who will still be in business if there is a fault — and will do the testing necessary to lodge a successful warranty claim with the manufacturer.

This third point is very important in practical terms, and a good reason why it is not always wise to buy solar from the cheapest company.

What are Tier 1 solar panel manufacturers?

The concept of an elite list of Tier 1 solar panel manufacturers was first used by Bloomberg New Energy in a report on the "bankability" of different solar panel brands.

They chose brands that had been financed on a non-recourse basis by several banks, over several different projects greater than 1.5 megawatts in size.

While Bloombeg’s definition of Tier 1 is somewhat useful, in our view it’s insufficient as a guide for consumers. It only judges the solar panels based on past performance, and doesn’t attempt to predict the future reliability of each manufacturer.

Given that solar panels last 25-30 years, we think much more weight should be given to the future prospects of the brand, as well as the manufacturer’s future economic viability.

How we define Tier 1 solar panel manufacturers

The editorial committee of solar industry experts here at SolarReviews came up with our own definition of a Tier 1 solar panel brand.

We used six criteria, and we encourage you to use them when evaluating any solar panel brand. Here they are:

1. The manufacturing quality of the company’s factories, and the degree of integration across the solar value chain (ingots -> wafers -> cells -> panels) in their manufacturing process.
   
   Why? Less defects means less future warranty claims. Good for you, and good for the company’s ongoing viability.
2. The scale and marginal cost of the company’s panel manufacturing.
   
   Why? Low cost manufacturers are more likely to survive and honour warranty claims.
3. The current profitability and net assets of the manufacturer — also our ability to get visibility on this.
   
   Why? It is difficult for us to recommend a company that offers a 25-year warranty if we cannot see their financial position.
4. The efficiency of the cell technology the company has, or is developing, and how this will position the company in the future.
   
   Why? If a company’s products fail to keep pace with industry leaders they will lose pricing power.
5. The price of the solar panels versus competitors.
   
   Why? Solar panels are as much a financial investment for most people as they are an environmental choice, so value for money is important.
6. The strength of the manufacturer’s dealer network of local installers in America.
   
   Why? Even if a company has a strong global profile, you want to be sure that they are committed to the domestic US market and local customers.

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Why don't we promote second- and third-tier solar panel brands?

Many second- and third-tier solar panel manufacturers that are based overseas — usually in China — do not honour their warranties.

They sign up a few dealers in America over the internet by offering cheap panels, but if there are any warranty issues they pin the blame on an "installation error" or a "cosmetic defect" that isn’t covered by warranty. As these companies invest little to nothing in their brand in the US, they have nothing to lose. Often they will simply start selling panels under a different brand.

Among these companies are also those that buy B-grade cells and wafers, and build panels out of them for cheap sale. Many of these smaller overseas companies also outsource large parts of their production to the cheapest contractor in China, and so it is impossible to get a gauge on real manufacturing quality.

US solar panel manufacturers

There are now very few US solar panel manufacturers.

Leading US manufacturers SolarWorld, Suniva and Silicon Energy have all gone broke, while market leader SunPower has moved most of its panel manufacturing to Malaysia, the Philippines and Mexico. Tesla has also closed their planned solar panel manufacturing plant in Buffalo, New York.

Ironically, the only well-known solar company with large-scale manufacturing in the USA is the Chinese solar giant Jinko Solar, who have a factory in Jacksonville, Florida.

We do know of two smaller brands that still make their panels in America: Mission Solar in Texas, and Washington-based Itek Energy (now owned by Canadian company Silfab). However, they are small manufacturers and we are unsure of their current production arrangements or volumes.

Although the Trump administration attempted to boost US manufacturing of solar panels by imposing tariffs on Chinese modules in 2018-2019, American-made panels have unfortunately been unable to compete with the low cost and high quality of Chinese and other imports.

3 types of solar panel manufacturing companies

It can be useful to sort manufacturers into groups that share common traits:

1. Premium manufacturers:

   This group contains LG, Panasonic and SunPower. Their panels are the most expensive on the market. They are all good companies and offer very good products, but they are placed in the premium category for different reasons.

   LG and Panasonic make good panels. But they are considered premium because of the strength of their overall corporate brand — and not because of the technical specifications of their panels. Their panels are only marginally, if at all, better than the other Tier 1 brands.

   In our view, any technical benefit offered by LG and Panasonic panels is too small to justify the price premium. What justifies the price premium — if it is justifiable — is the overall reliability of these companies.

   SunPower is different. They are in the premium category because their panels have long been market leaders in terms of panel efficiency, and they have grown a network of very high-quality installation partners. However, SunPower has recently sold off its panel manufacturing business into another listed entity called Maxeon, which is part-owned by a Chinese wafer manufacturer.

   This provides an element of uncertainty around SunPower solar panels. That said, we do believe that they will continue to deliver a very good premium offering. They will need to continue to innovate to justify their price premium, as several of the lower-cost Chinese Tier 1 manufacturers have recently announced new cell technology that is as, or more, efficient than the current market-leading SunPower cells.

   SolarReviews takeaway:
   Great panels by great companies, but better value is available elsewhere. As panel efficiency is already taken into account when panels are rated as a particular wattage, slight efficiency advantages are unlikely to translate into significant extra power generation.

2. High quality Tier 1 solar panel manufacturers:

   This is a group of mainly Chinese solar panel manufacturers that are dominating the global solar panel market. They have not had the same success in the residential US solar market, although they are steadily growing their market share.

   This category includes manufacturers like LONGi Solar, Canadian Solar (actually a Chinese company), Trina Solar, Jinko Solar, GCL Group, Risen Energy.

   Their best panels are currently 1-2% less efficient than SunPower, but this looks set to change. Both Trina and LONGi have announced cell technology improvements for Fall 2020 that offer equivalent efficiency to the premium manufacturers, but at a lower price point.

   While we have concerns about the lack of financial transparency from some of these Chinese companies, their lower price point, improving technology and massive manufacturing scale may make them as reliable as the premium brands.

   SolarReviews takeaway:
   You are very unlikely to have any problems with the solar panels from either the premium brands or these Tier 1 Chinese manufacturers. The decision is probably whether you want to support a Chinese company to save money on your solar system. We can see many good moral arguments why one may not wish to do this.

3. Second and third Tier solar panel manufacturers:

   There are many other smaller brands of Chinese solar panels — we recommend that you avoid them.

   The reason is that the high quality Tier 1 Chinese brands above are already quite low cost, come with some transparency, and place some value in their brand. As such, they offer good value to homeowners.

   With the smaller Chinese brands, by contrast, there is no transparency. We’ve seen several of these companies simply shut their presence in a country when faced with warranty claims.

   SolarReviews takeaway:
   Buying from these manufacturers means lower chances of getting quality panels or seeing your warranty claims honored. The small upfront savings you can get from these panels simply isn’t worth it.

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