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Photovoltaic project investment based on the real options method: An analysis of the East China power grid region

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  • Yang, Changhui
  • Jiang, Qi
  • Cui, Yangyu
  • He, Lijun

Abstract

Distributed photovoltaics (PV) play a key role in the energy transition. We construct an investment value and timing assessment model based on the real options method to improve scientific decision-making in distributed PV investing in an uncertain environment. The model is applied to analyze projects in the East China Power Grid region under multiple self-consumption ratio scenarios. The results show that investing in distributed PV projects is beneficial, but there are differences in the optimal investment timing under different self-consumption ratios. Investors can defer investment for as early as one year to obtain optimal investment value.

Suggested Citation

  • Yang, Changhui & Jiang, Qi & Cui, Yangyu & He, Lijun, 2023. "Photovoltaic project investment based on the real options method: An analysis of the East China power grid region," Utilities Policy, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:juipol:v:80:y:2023:i:c:s0957178722001370
    DOI: 10.1016/j.jup.2022.101473
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