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Distributed Photovoltaic Generation in Ecuador: Economic Analysis and Incentives Mechanisms

In the last years, the manufacturing and installation costs of photovoltaic generators (PV) are gradually shrinking. This reduction in costs incentives the use of PV by the end user to satisfy its own demand and sell the surplus energy to the power distribution network. This paper evaluates the competitiveness to integrate small-scale PV in the city of Quito-Ecuador. These PV will be used to self-consumption for residential and commercial users affiliated to “Empresa Eléctrica Quito”, which is the entity that manages the power requirements in Quito city. The levelized cost of electricity incurred by building and operating a PV is calculated and compared with the price used to purchase energy from the electrical distribution network. The concept of grid parity is analyzed by this comparison, including electricity tariffs and costs for the year 2018. OpenDSS software is used to estimate the energy supplied from PV in function of temperature and irradiation data gathered in Quito city. Finally, annual economic benefits obtained by the users are determined. Results show that there is not grid parity in 2018 yet, but the parity status could be reached by economic incentive schemes as Net Billing.