PV Manufacture Ranking

How to choose great solar panels

 

Introduction

There are many hundreds of PV manufacturers in the world today and determining which one represents the best choice depends on a number of factors. Although there are no hard and fast rules regarding the ranking of manufacturers, there are some sound general principles used by industry analysts and financial institutions which help to understand the issue.

Tier ranking

The PV and financial industry uses a ranking known as the Tier system to define the characteristics of PV manufacturers. In simple terms a Tier 1 ranking is the highest score and a Tier 3 ranking the lowest.

Many factors (which vary by assessor) determine what the different Tiers actually represent but ultimately a Tier 1 ranking represents the best mix of experience, reputation, financial strength and technological capability.

It’s also important to note that Tier rankings vary over time; along with changes in company performance and competitive position, positions can and do change over time too.

Financial institutions tend to look for comprehensive financial strength; debt to asset ratio’s, liquidity, stock exchange performance and so on. They are interested in making sure finance offers to these companies are sound, although they rate experience and technology highly too.

PV companies and consumers are potentially more interested in other factors such as warranty terms, performance and localised support to determine their preferences.

I would argue that Tier rankings also mean different things in different markets too; a Tier 1 manufacturer who doesn’t support or understand your local market well may offer less value than a highly committed Tier 2 supplier, for example.

Australian Tier Ranking

I have looked at a variety of International ranking systems and in the Australian context; this is what I would look for to determine the different Tier classes. Note that it is rare to see all of these attributes in a single company and that they need to be balanced against practical factors such as price and availability too.

Tier 1

  • Very strong brand –  preferably recognisable to end consumers who don’t know anything about solar power or at minimum. Very strong within the PV industry
  • Large scale – manufacturing in excess of 750MW p/a
  • Research and Development- Significant investments in research and development
  • Vertically integrated – involved in upstream process such as silicon purification, casting, wafering, cell making not just module assembly
  • Manufacturing experience- more than 5 years manufacturing experience in the PV industry and typically has high degree’s of automation
  • Quality assurance – the company has an depth and readily explainable quality assurance program beyond 100% inspection and typically similar to automotive processes
  • Healthy financial position – the company has sufficient financial strength, assets, liquidity and or parent capital to weather tough times
  • Active industry participant  - a  supporter of local industry associations and market development
  • Experience – success in a variety of markets, applications and large scale projects spanning at least 5 years
  • Transparent disclosure – the company is open and transparent about ownership, sub contract manufacture, materials and position
  • Strong parent – the company has a very strong parent company (who may be from another industry) providing diversity of income and has disclosed its ownership structure
  • Technological performance – the products are best in class or near best in class and demonstrate strong innovation, performance or features
  • Environmental and social credentials – the company have an open book on environmental performance and participate in programs such as PV Cycle and the Solar Scorecard. The company has an open and transparent attitude towards social issues and its employee’s welfare
  • Local coverage – has representative offices in your region with experienced support staff who understand the local market

Tier 2

  • Medium brand – not recognisable to end consumers and less known within the PV industry
  • Medium scale – manufacturing less than 750MW p/a greater than 200MW p/a
  • Research and Development- Small investments in research and development
  • Non vertically integrated – involved to a small degree  in upstream process such as silicon purification, casting, wafering, cell making not just module assembly
  • Manufacturing experience- less than 5 years manufacturing experience in the PV industry and typically a small degree’s of automation
  • Quality assurance – the company has quality assurance programs in place but less sophisticated
  • Medium financial position – the company has a smaller degree of financial strength, assets, liquidity and or parent capital to weather tough times
  • Less active industry participant  – offers occasional  support to local industry associations and market development
  • Experience – success in a selected markets, applications and few large scale projects
  • Transparent disclosure – the company is open and transparent about ownership, sub contract manufacture, materials and position
  • Strong parent – the company has a very strong parent company (who may be from another industry) providing diversity of income and has disclosed its ownership structure
  • Technological performance – the products are mid range or near best in class and demonstrate reasonable innovation, performance or features
  • Environmental and social credentials – the company has made some statements about its environmental performance and  attitude towards social issues and its employee’s welfare
  • Local coverage – has representative staff in your region but no formal office or team

Tier 3

  • Low brand – not recognisable to end consumers or the PV industry
  • Small scale – manufacturing less than 200MW p/a
  • No research and Development- very limited or no investments in research and development
  • Non vertically integrated – purely involved in module assembly
  • Manufacturing experience- less than 3 years manufacturing experience in the PV industry and typically does not include automation
  • Quality assurance – the company has limited or basic quality assurance programs in place
  • Low financial position – the company has a smaller or unclear degree of financial strength, assets, liquidity and or has no know parent company
  • In-active industry participant  – does not offer support to local industry associations or support market development
  • Experience – success in one or a very small number of markets and applications, no large scale projects
  • Transparent disclosure – the company is not open and transparent about ownership, sub contract manufacture, materials and position. Frequent co-branding of products.
  • Parent – the company does not have or disclose the parent company
  • Technological performance – the products are low to mid-range and demonstrate reasonable minimal innovation, performance or features
  • Environmental and social credentials – the company has no or minimal environmental performance and  attitude towards social issues and its employee’s welfare
  • Local coverage – the company has no local representation