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

Changhui Yang, Qi Jiang, Yangyu Cui and Lijun He

Utilities Policy, 2023, vol. 80, issue C

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.

Keywords: Distributed photovoltaics; Real options; Investment decisions (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:80:y:2023:i:c:s0957178722001370

DOI: 10.1016/j.jup.2022.101473

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