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We often hear the question "Are these solar panels Tier 1?" What people usually refer to is if they are on the Tier 1 List.
What is the Tier 1 list anyhow?
The Tier 1 list, updating every quarter, has historically provided a consistent source list for ‘bankability’ within the solar manufacturing industry. Investors tend to use this to determine if the solar panels they are using for their projects are backed by a strong warranty and company that will be expected to operate for the full 25 years of planned operation – and hopefully beyond.
Bloomberg, being a bank, defines bankability as: if solar products are likely to be offered non-recourse debt financing by banks.
Tier 1 Qualifications:
To qualify for the Tier 1 list, and listed in order of accomplishment, a manufacturer needs to prove:
• At least 6 different projects of 1.5 MW’s or more in the past 2 years
• Which have received non-recourse debt financing by 6 different banks (where available – otherwise additional documentation is needed)
Bloomberg, being a bank, defines bankability as: if solar products are likely to be offered non-recourse debt financing by banks.
Tier 1 Qualifications:
To qualify for the Tier 1 list, and listed in order of accomplishment, a manufacturer needs to prove:
• At least 6 different projects of 1.5 MW’s or more in the past 2 years
• Which have received non-recourse debt financing by 6 different banks (where available – otherwise additional documentation is needed)
• Manufacturers need to own production facilities and the brand name
• Cannot have filed bankruptcy, insolvency, or defaulted on bond payments
A solar manufacturer can submit documents to Bloomberg for review, however Bloomberg will tier companies regardless of receiving additional information and will review companies based on their database. As can be seen these requirements prove that a manufacturer has a lot of financing around its customers and projects though this does not directly show a strong business model or financial stability – which might be a priority for anyone looking for long and stable warranty coverage.
Alternatives to the Tier 1 List:
There are alternative lists that might help determine a strong company. One example is Thomson Reuters which outlines leadership in the solar industry through risk mitigation. They list the top 20 Renewable Energy company’s. But there are others who use a relative set of information to establish the best in industry depending on the goal.
If you have any question about “bankability” please let us know so we can address your concern explicitly through the number of existing industry standards.
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