Potential Strategies to Promote Residential Distributed Photovoltaic Generation through Grid Parity Analysis: An Ecuadorian Study Case

In recent years, climate change, natural disasters, and poor management of electrical systems in Latin America have caused an energy crisis. Ecuador currently faces an electricity deficit of 1,000 MW, which could be reduced by installing residential photovoltaic (PV) systems ranging from 1 kWp to 4 kWp. However, limited government incentives mean that homeowners show little interest in PV systems, delaying their future deployment. This work comprehensively analyzes the residential PV deployments according to grid parity and payback periods. To this end, we analyze the case study of Ecuador, evaluating the profitability of distributed PV systems according to user consumption and the electric tariff. Several PV system simulations were performed using empirical data collected in Quito, Ecuador. In addition, we propose a financial model based on Levelized Cost of Energy (LCOE). Scenario analysis indicates that grid parity is achievable when incentives are offered or discount rates are increased, making distributed residential PV more attractive. Empirical results show that the most favorable scenario reduces the time to achieve network parity by up to nine years.