Bloomberg Tier 1 Module Ranking – Is It Really a List of Top Photovoltaic Panel Manufacturers?

The Bloomberg Tier 1 ranking is a classification system used by Bloomberg New Energy Finance (BNEF) to rank photovoltaic (PV) module manufacturers based on bankability, or the willingness of banks to offer non-recourse loans to projects that use their products. It's important to note that this ranking is not a measure of quality, reliability, or performance of the PV modules. Instead, it's a measure of the manufacturer's financial stability and market acceptance.

The criteria for inclusion in the Bloomberg Tier 1 list are stringent. A manufacturer must own its production facilities and have supplied own-brand, own-manufacture products to six different projects that have been financed by six different non-recourse banks in the past two years. This ensures that only manufacturers with a strong track record of reliability and financial stability make the cut.

Despite its widespread use, there are several misconceptions about the Bloomberg Tier 1 ranking. The most common one is that it's a quality ranking. As mentioned earlier, the ranking is based on bankability, not quality. A Tier 1 manufacturer is not necessarily better than a Tier 2 or Tier 3 manufacturer in terms of product quality or performance.

Another misconception is that all Tier 1 manufacturers are equal. The ranking does not differentiate between the manufacturers within the Tier 1 category. A manufacturer that barely meets the criteria is ranked the same as one that far exceeds them. This can lead to a false sense of equivalence among the manufacturers.

Despite its limitations, the Bloomberg Tier 1 ranking is a valuable tool for investors and project developers. It provides a quick and easy way to assess the bankability of PV module manufacturers, which is a critical factor in project financing. It also serves as a benchmark for the industry, encouraging manufacturers to strive for financial stability and market acceptance.

However, it's important to use the ranking as just one of many tools in the decision-making process. Other factors, such as product quality, performance, and manufacturer reputation, should also be considered. By doing so, one can make a more informed decision and choose the PV module manufacturer that best suits their needs.

In conclusion, while the Bloomberg Tier 1 ranking is not a definitive list of the top photovoltaic panel manufacturers in terms of quality, it is a valuable tool for assessing bankability. As with any tool, it's important to understand its limitations and use it appropriately.