Market Trends of Ecuador Solar Energy Industry
This section covers the major market trends shaping the Ecuador Solar Energy Market according to our research experts:
Growing Demand for Electricity to Drive the Market
- Globally, electricity plays a vital role as a factor of economic growth and social welfare, in which it is essential to have an accessible, reliable, and sustainable forms of energy.
- During 2018, Ecuador has a solar install capacity of around 26 MW, with an electricity generation capacity of nearly 41GWh. Ecuador's renewable energy contributes nearly 0.7% of the total energy mix.
- Moreover, Ecuador's demand for electricity is expected to have a demand of around 32 terra watt-hours (TWh) by 2025, and with its target to reduce the carbon emission by having an alternative source of energy, renewable sources are likely to grow during the period.
- Moreover, Solar energy is becoming inexpensive in comparison to other conventional energy sources due to innovations in the solar sector that have reduced the global average selling prices of solar PV. With the anticipated improvements in technology and increased supply of panels from China/Europe, the capital costs are expected to stabilize at lower levels. As a result, investors/developers are expected to focus on the commercial viability of solar projects.
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High Initial Investment to Resist the Market
- Although the cost of producing photovoltaic devices continues to fall across the globe, the rate of adoption of solar PV is not that too rapid as expected. Although there are numerous socio-technical and regional policy challenges in place, the economic factor of the high initial cost of investments required for setting up of a solar PV plant acts as a major restraint.
- Apart from the costs of the solar PV modules, costs such as high installation cost, operation cost, maintenance and repair costs, and the low costs of competing sources of energy, also add to the cost of investments required for solar PV installations.
- Installation of a solar photovoltaic (PV) array is not only an environmental-specific decision but also a financial decision as well. Irrespective of the decreasing cost of equipment, the cost of permits and labor along with the installation of solar PV installation with challenging and complex orientation adds to a great deal to the final installation costs.
- Furthermore, the payback period risks and return on investment of solar PV compared to other sources of fuels, when environment factors are not considered, is high. Thus, all these factors are likely to act as a restraint for the market to grow during the forecast period.
