I think you should be able to refit any ship in the game. But it should only increase its rank by 1. So yes you could refit a Tier 1 ship to what the Tier 2 ship has. But come on you really think that a Tier 1 should be able to bet refitted to a Tier 5 thats silly. IMO
So, I asked a GM in game about lower tier ship upgrades/refits and i got a smiley face in return. It could mean anything, but it seems to me to be a positive thing. I think we will see this in game in the future. Maybe not for season 2, but in a future update. Season 2 if we are really lucky and the devs really like us.
One possibilty could be to make each tier upgraded more expensive. One tier upgrade might cost something like 250 000 credits, and doubling for each aditional tier you upgrade. Exaples included below:
upgrade costs for tier 1 to any higher tier:
1->2 250 000 credits
1->3 500 000 credits
1->4 1 000 000 credits
1->5 2 000 000 credits
For tier 2 to any higher tier:
2->3 250 000 credits
2->4 500 000 credits
2->5 1 000 000 credits
NB: numbers included as an example only!
Upgrade costs would, off course, be calculated from you "base tier". That is, if you upgrade you beloved Centaur from tier 1 to tier 2, it would cost you 250 000 credits. If you like it so much that you dicide to keep it and upgrade to tier 3, you must pay 500 000 credits since it's an upgrade from the "base" tier 1. In other words, your "base tier" won't increase as you upgrade you ship.
This would reflect the increased cost and difficulties involved in making a low-end ship into a high-end.
I don't doubt that smaller ships in capable hands can win in PvP and fully intend to grab my T2 cruiser at some point just to play for pure fun but if it was a T2 refit making it T3 that would add to the fun factor and your chance of doing more
the lack of boff powers and weapon slots will never make lower tier vessels viable (t4 is basically the lowest you can go without screwing yourself over too much) no matter what kind of hack captain you are.
Show up wit a t1-t3 ship before my Galaxy x and i will melt you down without you EVER being able to break my tank.
If we ever get refit options, the first thing those refits should do is bring the ship up to t5 stats - even if it means it will get worse in some areas (turnrate for example).
A proper baseline that all vessels at that level share is needed before you can start thinking about "individualization".