Bankability: what is it and how do you assess it?

If you’re thinking about installing solar panels, you know that it’s a long-term investment. Solar panels are built to last and many manufacturers offer warranties extending 25 years. So how do you ensure that the manufacturer of your panels will be able to uphold this warranty? One indicator is your manufacturing company’s bankability

What does it mean to be “bankable”?

If a solar panel manufacturer is bankable, it means that the market has confidence in its reliability as a company. Practically, this means that financial institutions are willing to finance a project with a manufacturer’s panels at a reasonable interest rate because they think it’s a worthy investment. Manufacturers that are bankable are more likely to be in business long-term and not file for bankruptcy in the near future. 

Why is bankability of your manufacturer important to consider?

When you’re deciding which panels to purchase, there are two major components to consider in relation to bankability: equipment quality and warranty coverage. First, you want to make sure that you’re getting quality panels that will produce solar energy efficiently and with little maintenance. Second, if something does happen to go wrong with your panels, you want to know that your warranty will cover any necessary repairs or replacements. Because bankability takes into account the quality of the product and the financial stability of the manufacturing company, it’s helpful to get an idea of how bankable the manufacturer is before deciding which panels to install.

How do you assess the bankability of a solar panel manufacturer?

Bankability isn’t exactly straightforward, and there are a number of factors to consider when researching the bankability of a panel manufacturer. We’ve outlined a few different metrics below that can help you determine the bankability of your panel manufacturer. However, it’s important to note that none of these metrics are perfect and they can vary over the lifetime of your warranty.

Altman Z-Score

One important indicator of bankability is a manufacturer’s Altman Z-Score. An Altman Z-Score is calculated using eight different variables that you can find on a publicly-traded company’s annual 10-K report about their financial performance. This report is free and publicly available and can be accessed through the U.S. Securities and Exchange Commission’s EDGAR database. The score tells you the company’s likelihood of bankruptcy over the next two years based on five ratios that use these eight variables. The ratios include:

  • A = working capital / total assets
  • B = retained earnings / total assets
  • C = earnings before interest and taxes (EBIT) / total assets
  • D = market value of equity / total liabilities
  • E = total sales / total assets

Using these five ratios, you calculate the score based on the following equation:

Altman Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Generally, for a manufacturing company, a score above 2.99 indicates that the company has a low probability of filing for bankruptcy over the next two years. Companies with scores at 1.80 and below have a very high risk of failing over the next two years. While this metric can help you determine the immediate financial security of your manufacturer, it’s difficult to ascertain how well your company will be performing in 20 years from now based on its Altman Z-Score.

BNEF ranking

Bloomberg New Energy Finance (BNEF) has been publishing reports on the bankability of various solar panel manufacturers since 2012. Each quarter, BNEF releases a list of panel manufacturers that it considers to be tier 1, meaning they are very bankable. Based on their methodology from October 2020, BNEF recognizes manufacturers as tier 1 if they “have provided own-brand, own-manufacture products to at least six different projects, which have been financed non-recourse by six different commercial (ie not development, not export-import) banks, in the past two years.” By non-recourse, BNEF means that the borrower is not personally liable for the loan; the lender of the loan is not able to pursue anything beyond the collateral (the property itself). 

Any manufacturers who don’t meet the tier 1 criteria are considered either tier 2 or tier 3, but BNEF doesn’t release lists of these manufacturers. While the BNEF ranking can be very helpful for getting an idea of the bankability of your manufacturer, the criteria are quite strict and can exclude some high-quality manufacturers. For example, a new company may be producing extremely durable panels with new technology, but will be listed as tier 3 because it is new to the industry. For this reason, BNEF states that its list shouldn’t be used to measure the quality of the panels themselves. Another consideration is that the tier 1 list excludes reputable companies that outsource their production. While many manufacturers will market themselves as being tier 1 if they qualify, if you want to access the full tier 1 list, you’ll need to pay for a Bloomberg subscription.

Independent testing data

One way to examine the quality of a solar panel manufacturer is through independent testing data. While all solar panel modules undergo rigorous testing before going to market, some independent testing labs will perform additional technical due diligence to assess the quality of panels and bankability of manufacturing companies. One such lab is PV Evolution Labs (PVEL), which, in partnership with DNV GL, releases a quarterly PV Module Reliability Scorecard that ranks solar panels and manufacturers. 

Manufacturers elect to participate in this program and many BNEF tier 1 manufacturers are included. The scorecard ranks these manufacturers and their solar panels based on their quality and durability in an effort to provide consumers, installers, and investors with reliable, third-party performance data. If you’re interested in seeing if a manufacturer you’re considering is ranked, you can download the scorecard for free. 


Finally, one easy way to get an initial understanding of a manufacturer’s bankability is by looking at its reviews. Manufacturers with more positive reviews are more likely to produce quality equipment and be in business for longer. On EnergySage, you can compare reviews of product manufacturers on our site. It can be particularly helpful to look for reviews in your area to see how the products fare in similar environmental conditions. You can check out our take on some of the top solar panel companies and manufacturers to gain a little more insight.

Insurance and bankability

At the end of the day, if you’re concerned about the bankability of the manufacturer that you’d like to select, you still have options beyond the warranties offered by the manufacturer and your installer. Some manufacturers are warranty-insuring, meaning their warranties will be upheld by third-party backers even if the manufacturer declares bankruptcy. If your manufacturer doesn’t fall into this category, you can usually purchase an insurance policy to cover your installation. However, it’s important to note that these policies are often expensive and can end up costing just as much as or more than the necessary repairs and/or replacements. 

How EnergySage can help

On the EnergySage Marketplace, you can receive quotes from installers that are qualified and pre-vetted, and are choosing products from reputable manufacturers with quality products. If you have any questions about the solar equipment that is provided in your quote, you can schedule an appointment with your dedicated Energy Advisor or leave a note in your profile so that installers can reach out to you with more information about their product selection. 

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About Emily Walker

With over five years of experience in environmental science and clean energy, Emily is an expert in solar, battery, and energy management technology and policy. She holds a Master of Science in Environmental Science and Policy from Johns Hopkins University and a Bachelor’s Degree in Environmental Science and Biology from Colby College. Emily is always looking for ways to live her life more sustainably and is currently in the process of electrifying her home.