The Ecuadorian government has introduced a 0% rate for value-added tax (VAT) and the tax on foreign currency outflows (ISD) on certain equipment and components used in the electricity sector, including solar PV and energy storage systems. The measure is established under Executive Decree 530, signed by President Daniel Noboa and published on Nov. 11 in the Fifth Supplement to Official Gazette No. 407.
The decree amends Article 194 of the regulations implementing the Internal Tax Regime Law. It covers equipment, turbines, inverters, generators, machinery, materials, supplies, components and systems, as well as associated parts and accessories. Eligible goods must be intended for the installation, expansion, rehabilitation, modernization, operation or maintenance of electricity infrastructure.
The 0% tax rates apply to equipment used in solar PV, wind, hydropower, thermal and geothermal generation facilities, among other technologies. They also cover energy storage systems and their components, as well as electricity transmission, distribution and retail infrastructure.
The Ministry of Environment and Energy has issued Ministerial Agreement MAE-MAE-2026-0118-AM, identifying 55 categories of goods eligible for the 0% VAT rate on the domestic market. The list includes solar cells, modules, panels, generators, inverters, power optimizers, charge controllers, mounting structures, tracking systems and direct-current (DC) solar cables.
For energy storage, eligible products include stationary battery cells and modules, battery banks, integrated storage systems, bidirectional converters and battery management equipment.
The agreement also establishes 104 tariff subheadings covering imports eligible for the 0% ISD rate. The tax benefits apply exclusively to goods and transactions expressly listed in the official annexes.
Article 55 of the Internal Tax Regime Law already provided for a VAT exemption on solar PV generation equipment and accessories. The new decree clarifies the regulatory scope of that provision and establishes the ISD treatment for imports included in the official list.
Both the decree and the ministerial agreement were published on Nov. 11, with the new rates taking effect on Nov. 12, 2026.
The decree also includes a transitional provision covering domestic purchases and imports made between Jan. 1, 2026, and the date the reform entered into force. Taxpayers may deduct VAT paid on eligible goods as an expense for the 2026 income tax year, provided the amounts have not already been claimed as input tax credits or offset against VAT collected on sales.
The measure forms part of broader regulatory changes in Ecuador’s electricity sector. The country has been seeking to accelerate private investment in renewable energy following the electricity shortages and widespread blackouts of 2024.
In August 2025, the government had authorized 643 MW of private renewable energy projects, including solar and hydropower. The total comprised 179.1 MW of distributed generation projects intended to supply the electricity market and 464.6 MW of self-generation capacity for corporate consumers, with the option to sell surplus electricity.
According to the International Renewable Energy Agency (IRENA), Ecuador had 131.35 MW of cumulative installed solar PV capacity at the end of 2025, up from approximately 84 MW in 2024.
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Tuesday, November 24, 2026
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