IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v148y2025ics0140988325004505.html

Comparison of county-level rooftop photovoltaic development models in China's electricity spot market

Author

Listed:
  • Wang, Feng
  • Chen, Zhiyuan

Abstract

To achieve its “dual carbon” objectives, China must refine its approach to the deployment of rooftop distributed photovoltaic (DPV) systems across entire counties. Existing research often neglects the rooftops of commercial, industrial, and public institutions and lacks comparative analyses of different development models. This paper innovatively integrates the Monte Carlo method into an asymmetric tripartite evolutionary game model to evaluate the efficiency of various guiding policies and business models. Additionally, it explores the potential impact of electricity spot trading on the development of rooftop DPV systems. The study finds that financial policies are more effective than pure price policies, whereas mixed policies are the least efficient. The optimal business model varies with the policy environment: under financial and mixed policies, the owner self-construction model yields the highest expected utility, while under pure price policies, the financial leasing model is preferable. Moreover, the introduction of electricity spot trading significantly reduces the expected benefits for rooftop PV operators and heightens benefit volatility. These findings remain robust even when installation scale constraints are relaxed. Furthermore, higher rooftop leasing prices hinder the development of commercial and industrial rooftop PV systems, while excessive ancillary service prices may alter the Nash equilibrium among stakeholders. Our findings offer valuable insights for policymakers aiming to address the “inversion” problem in the development of county-wide rooftop photovoltaic (PV) systems and provide practical references for building a renewable energy-friendly electricity system.

Suggested Citation

  • Wang, Feng & Chen, Zhiyuan, 2025. "Comparison of county-level rooftop photovoltaic development models in China's electricity spot market," Energy Economics, Elsevier, vol. 148(C).
  • Handle: RePEc:eee:eneeco:v:148:y:2025:i:c:s0140988325004505
    DOI: 10.1016/j.eneco.2025.108623
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988325004505
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.eneco.2025.108623?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Su, Xiaoning & Liu, Pengfei & Mei, Yingdan & Chen, Jiaru, 2023. "The role of rural cooperatives in the development of rural household photovoltaics: An evolutionary game study," Energy Economics, Elsevier, vol. 126(C).
    2. Benth, Fred Espen & Kiesel, Rüdiger & Nazarova, Anna, 2012. "A critical empirical study of three electricity spot price models," Energy Economics, Elsevier, vol. 34(5), pages 1589-1616.
    3. Rai, Alan & Nunn, Oliver, 2020. "On the impact of increasing penetration of variable renewables on electricity spot price extremes in Australia," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 67-86.
    4. Tian, Bingying & He, Yongxiu & Zhou, Jinghan & Wang, Bingwen & Wang, Yi & Shi, Wenran, 2023. "Cost-sharing mechanisms for pumped storage plants at different market stages in China," Renewable Energy, Elsevier, vol. 217(C).
    5. Motamedi Sedeh, Omid & Ostadi, Bakhtiar, 2020. "Optimization of bidding strategy in the day-ahead market by consideration of seasonality trend of the market spot price," Energy Policy, Elsevier, vol. 145(C).
    6. Ding, Liping & Zhu, Yuxuan & Zheng, Longwei & Dai, Qiyao & Zhang, Zumeng, 2023. "What is the path of photovoltaic building (BIPV or BAPV) promotion? --The perspective of evolutionary games," Applied Energy, Elsevier, vol. 340(C).
    7. Yucekaya, A., 2022. "Electricity trading for coal-fired power plants in Turkish power market considering uncertainty in spot, derivatives and bilateral contract market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
    8. He, Ye & Wu, Hongbin & Wu, Andrew Y. & Li, Peng & Ding, Ming, 2024. "Optimized shared energy storage in a peer-to-peer energy trading market: Two-stage strategic model regards bargaining and evolutionary game theory," Renewable Energy, Elsevier, vol. 224(C).
    9. Zhao, Chuan & Guo, Qidong & Jia, Rongwen & Dong, Kangyin & Wang, Kun, 2023. "How does clean energy transition promote original design manufacturers? A three-party evolutionary game analysis," Energy Economics, Elsevier, vol. 126(C).
    10. Brinker, Laura & Satchwell, Andrew J., 2020. "A comparative review of municipal energy business models in Germany, California, and Great Britain: Institutional context and forms of energy decentralization," Renewable and Sustainable Energy Reviews, Elsevier, vol. 119(C).
    11. Gabriel, Cle-Anne & Kirkwood, Jodyanne, 2016. "Business models for model businesses: Lessons from renewable energy entrepreneurs in developing countries," Energy Policy, Elsevier, vol. 95(C), pages 336-349.
    12. Liao, Wei & Xiao, Fu & Li, Yanxue & Zhang, Hanbei & Peng, Jinqing, 2024. "A comparative study of demand-side energy management strategies for building integrated photovoltaics-battery and electric vehicles (EVs) in diversified building communities," Applied Energy, Elsevier, vol. 361(C).
    13. Zhang, Xi & Zhu, Qingyuan & Li, Xingchen & Pan, Yinghao, 2023. "The impact of government subsidy on photovoltaic enterprises independent innovation based on the evolutionary game theory," Energy, Elsevier, vol. 285(C).
    14. Wu, Haixia & Ge, Yan & Li, Jianping, 2023. "Uncertainty, time preference and households’ adoption of rooftop photovoltaic technology," Energy, Elsevier, vol. 276(C).
    15. Liu, Tingting & Xu, Jiuping, 2021. "Equilibrium strategy based policy shifts towards the integration of wind power in spot electricity markets: A perspective from China," Energy Policy, Elsevier, vol. 157(C).
    16. Karami, Mahdi & Madlener, Reinhard, 2022. "Business models for peer-to-peer energy trading in Germany based on households’ beliefs and preferences," Applied Energy, Elsevier, vol. 306(PB).
    17. Duman, A. Can & Güler, Önder, 2020. "Economic analysis of grid-connected residential rooftop PV systems in Turkey," Renewable Energy, Elsevier, vol. 148(C), pages 697-711.
    18. López Prol, Javier & Steininger, Karl W., 2020. "Photovoltaic self-consumption is now profitable in Spain: Effects of the new regulation on prosumers’ internal rate of return," Energy Policy, Elsevier, vol. 146(C).
    19. Gudkov, Nikolay & Ignatieva, Katja, 2021. "Electricity price modelling with stochastic volatility and jumps: An empirical investigation," Energy Economics, Elsevier, vol. 98(C).
    20. Zhixin Zhang & Min Chen & Teng Zhong & Rui Zhu & Zhen Qian & Fan Zhang & Yue Yang & Kai Zhang & Paolo Santi & Kaicun Wang & Yingxia Pu & Lixin Tian & Guonian Lü & Jinyue Yan, 2023. "Carbon mitigation potential afforded by rooftop photovoltaic in China," Nature Communications, Nature, vol. 14(1), pages 1-12, December.
    21. Saez, R. & Boer, D. & Shobo, A.B. & Vallès, M., 2023. "Techno-economic analysis of residential rooftop photovoltaics in Spain," Renewable and Sustainable Energy Reviews, Elsevier, vol. 188(C).
    22. Rigo, Paula D. & Siluk, Julio Cezar M. & Lacerda, Daniel P. & Spellmeier, Júlia P., 2022. "Competitive business model of photovoltaic solar energy installers in Brazil," Renewable Energy, Elsevier, vol. 181(C), pages 39-50.
    23. Lyu, Yuan & He, Yongxiu & Zhou, Jinghan & Xie, Yuxin, 2023. "Prosumer standby fee design: Solving the inequity problem of China's county-wide photovoltaic project promotion," Renewable Energy, Elsevier, vol. 207(C), pages 309-320.
    24. Zhang, Minhui & Zhang, Qin & Zhou, Dequn & Wang, Lei, 2021. "Punishment or reward? Strategies of stakeholders in the quality of photovoltaic plants based on evolutionary game analysis in China," Energy, Elsevier, vol. 220(C).
    25. Shali Wang & Jiaxi Wu & Yunan Peng & Jane Xu & Lisa Leinonen & Yuyu Wang & Zheng Meng, 2022. "Influence of Residential Photovoltaic Promotion Policy on Installation Intention in Typical Regions of China," Sustainability, MDPI, vol. 14(14), pages 1-30, July.
    26. Liu, Zhengguang & Guo, Zhiling & Song, Chenchen & Du, Ying & Chen, Qi & Chen, Yuntian & Zhang, Haoran, 2023. "Business model comparison of slum-based PV to realize low-cost and flexible power generation in city-level," Applied Energy, Elsevier, vol. 344(C).
    27. Chen, Zhiyuan & Wang, Feng & Wang, Tieli & He, Rulin & Hu, Jieli & Li, Li & Luo, Ying & Qin, Yingling & Wang, Dingliang, 2024. "A real options approach to renewable energy module end-of-life decisions under multiple uncertainties: Application to PV and wind in China," Renewable Energy, Elsevier, vol. 226(C).
    28. Micheli, Leonardo & Theristis, Marios & Talavera, Diego L. & Nofuentes, Gustavo & Stein, Joshua S. & Almonacid, Florencia & Fernández, Eduardo F., 2022. "The economic value of photovoltaic performance loss mitigation in electricity spot markets," Renewable Energy, Elsevier, vol. 199(C), pages 486-497.
    29. Hu, Bo & Zhou, P. & Zhang, L.P., 2022. "A digital business model for accelerating distributed renewable energy expansion in rural China," Applied Energy, Elsevier, vol. 316(C).
    30. Schöniger, Franziska & Morawetz, Ulrich B., 2022. "What comes down must go up: Why fluctuating renewable energy does not necessarily increase electricity spot price variance in Europe," Energy Economics, Elsevier, vol. 111(C).
    31. Hu, Junfeng & Yan, Qingyou & Kahrl, Fredrich & Liu, Xu & Wang, Peng & Lin, Jiang, 2021. "Evaluating the ancillary services market for large-scale renewable energy integration in China's northeastern power grid," Utilities Policy, Elsevier, vol. 69(C).
    32. Xue, Liya & Liu, Junling & Lin, Xiaojing & Li, Mengyue & Kobashi, Takuro, 2024. "Assessing urban rooftop PV economics for regional deployment by integrating local socioeconomic, technological, and policy conditions," Applied Energy, Elsevier, vol. 353(PA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Yang & Li, Dezhi & Wei, Yigang & Wang, Wentao, 2025. "Promoting continuous emissions monitoring systems to curb rent-seeking: Evolutionary game insights," Energy Economics, Elsevier, vol. 148(C).
    2. Shen, Jian-jian & Cheng, Chun-tian & Jia, Ze-bin & Zhang, Yang & Lv, Quan & Cai, Hua-xiang & Wang, Bang-can & Xie, Meng-fei, 2022. "Impacts, challenges and suggestions of the electricity market for hydro-dominated power systems in China," Renewable Energy, Elsevier, vol. 187(C), pages 743-759.
    3. Yu, Zhe & Chen, Cuiying & Lou, Duo & Jiang, Jingjing & Ye, Bin, 2025. "Energy-economy-environment evaluation of building-integrated photovoltaic considering facade factors for representative megacities in China," Applied Energy, Elsevier, vol. 389(C).
    4. Kerscher, Selina & Koirala, Arpan & Arboleya, Pablo, 2024. "Grid-optimal energy community planning from a systems perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 199(C).
    5. Zhou, Dequn & Zhang, Yining & Wang, Qunwei & Ding, Hao, 2024. "How do uncertain renewable energy induced risks evolve in a two-stage deregulated wholesale power market," Applied Energy, Elsevier, vol. 353(PB).
    6. Liu, Bingchun & Zhao, Shunfan & Zheng, Shize & Zhang, Fukai & Li, Zefeng & Gao, Xu & Wang, Ying, 2025. "Assessing the potential impact of aerosol scenarios for rooftop PV regional deployment," Renewable Energy, Elsevier, vol. 246(C).
    7. Yuan, Qiuling & Meng, Fanxin & Li, Weijiao & Lin, Jianyi & Puppim de Oliveira, Jose A. & Yang, Zhifeng, 2025. "Tradeoff optimization of urban roof systems oriented to food-water-energy nexus," Applied Energy, Elsevier, vol. 380(C).
    8. Xiaohuan Xie & Haifeng Deng & Shengyuan Li & Zhonghua Gou, 2024. "Optimizing Land Use for Carbon Neutrality: Integrating Photovoltaic Development in Lingbao, Henan Province," Land, MDPI, vol. 13(1), pages 1-18, January.
    9. Li, Na & Lv, Tao & Guo, Yuxia & Xu, Jie & Zang, Xiuzhu & Guo, Jianli & Li, Mengyue, 2025. "Can government supervision ensure compliance by photovoltaic enterprises? An evolutionary game analysis," Energy Policy, Elsevier, vol. 206(C).
    10. Xu, Jian & Guo, Zhiling & Yu, Qing & Dong, Kechuan & Tan, Hongjun & Zhang, Haoran & Yan, Jinyue, 2025. "Spatiotemporal feature encoded deep learning method for rooftop PV potential assessment," Applied Energy, Elsevier, vol. 394(C).
    11. Bégin, Jean-François & Gómez, Fabio & Ignatieva, Katja & Li, Han, 2025. "The stochastic behavior of electricity prices under scrutiny: Evidence from spot and futures markets," Energy Economics, Elsevier, vol. 144(C).
    12. Rangarajan, Arvind & Foley, Sean & Trück, Stefan, 2023. "Assessing the impact of battery storage on Australian electricity markets," Energy Economics, Elsevier, vol. 120(C).
    13. Motamedisedeh, Omid & Omrani, Sara & Karim, Azharul & Drogemuller, Robin & Walker, Geoffrey, 2025. "A comprehensive review of optimum integration of photovoltaic-based energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 207(C).
    14. Javier L'opez Prol & Wolf-Peter Schill, 2020. "The Economics of Variable Renewables and Electricity Storage," Papers 2012.15371, arXiv.org.
    15. Olasehinde-Williams, Godwin & Köksal, Cihat, 2025. "Geoeconomic fragmentation: What is at stake for energy transition in the Global North? Empirical evidence from panel-quantile-type estimation methods," Innovation and Green Development, Elsevier, vol. 4(2).
    16. Xia, Yuanxing & Huang, Yu & Lin, Tinjun & Fang, Jicheng & Shi, Linjun & Wu, Feng, 2024. "Capturing opportunity costs of peer-to-peer energy transactions in microgrids via virtual state-of-charge bids," Applied Energy, Elsevier, vol. 376(PB).
    17. Biao Tao & Can Wang, 2024. "Promoting distributed photovoltaic adoption: An evolutionary game model approach for stakeholder coordination," PLOS ONE, Public Library of Science, vol. 19(6), pages 1-25, June.
    18. Bendig, D. & Brüss, L. & Degen, F., 2025. "Entrepreneurship in the renewable energy sector: A systematic literature review of types, characteristics, and sustainability impacts," Renewable and Sustainable Energy Reviews, Elsevier, vol. 212(C).
    19. Rangarajan, Arvind & Svec, Jiri & Foley, Sean & Trück, Stefan, 2025. "Revisiting the crisis: An empirical analysis of the NEM suspension," Energy Economics, Elsevier, vol. 141(C).
    20. Say, Kelvin & Csereklyei, Zsuzsanna & Brown, Felix Gabriel & Wang, Changlong, 2024. "The economics of public transport electrification: The charging dilemma," Energy Economics, Elsevier, vol. 135(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:148:y:2025:i:c:s0140988325004505. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.