Vertically Integrated means that the company manufacturing the solar panels manufacture every individual piece of the panels from the frame all the way to the silicon cells. This means that the panel manufacturers do not try to cut costs by manufacturing their panels using parts from other companies where they are unable to maintain quality control or enforce their strict quality guidelines on. Using other companies’ parts, whilst once good, can go down in quality over time resulting in panels that were once of great quality start to have many issues over the lifetime of the product.
Tier 1 panel manufacturers have some of the best research and development, pouring large amounts of capital into R&D to ensure they stay at the forefront of technology. A company wouldn’t be Tier 1 listed if their products were of poor quality so companies which invest heavily in R&D generally have the best products and with the best products comes consistent sales and profitability.
Whilst Tier 2 and Tier 3 panels typically have at least some degree of human production lines as part of the manufacturing process, Tier 1 panel manufacturers use robotic processes to automate and remove potential for human error during the manufacturing process. This ensures a consistent level of quality across the board while also in most cases saving the manufacturer costs over the long run. A win-win for you as the consumer – cheaper prices and better quality products!
In a relatively young industry, many solar panel manufacturing companies go under in less than 5 years. To hit the 5 year mark and exceed it, whilst meeting the other above criteria, as well as having company and product bankability – specifically whether projects using a particular brand of solar modules are likely to be offered non-recourse debt financing by non-development banks is hugely important. Have an issue with a solar panel or two? Have a fantastic 10-25 year warranty? All that is meaningless and you have no recourse should the company go under and is no longer able to service the warranty. This is why this is so important.
Not only that, but this is one of the main reasons we are using Phono Solar panels.
Another important factor to us for selecting panels here at Natural Solar on top of the official Bloomberg New Energy Finance criteria above is also whether the panel manufacturer has an office in Australia. This is hugely important as it means that the company can be held accountable to Australian Consumer Law and also means that there is a point of contact in Australia you are able to deal with and escalate if there are any issues. As a company, to us, this is hugely important.
This is the icing on the cake. Compared to many other solar panel manufacturing companies, Phono Solar panels and warranties are insured by both AIG International Insurance and Chubb International Insurance. This means that if the company goes bankrupt and you need to get a panel replaced, you are able to claim it against their insurance and still get recourse and compensation without finding out 15 years down the track the solar panels you purchased are starting to have issues and under-performing, reducing their ROI and effectiveness and you have no legal recourse.
These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes a general energy usage of 4000kWh/year for a residential customer on Energy Locals Time of Use Tariff – (TOU – Peak, Off-Peak & Solar Sponge).
The reference price is set by the Australian Energy Regulator (AER) for a financial year in relation to electricity supply to residential customers in the distribution region and is based on an assumed annual usage amount. Any difference between the reference price and the unconditional price of a plan is expressed as a percentage more or less than the reference price. The terms of any conditional discounts are shown, along with any further difference between the reference price and the discount applied if a condition is met, expressed as a percentage more or less than the reference price.
