Adequacy of photovoltaic power on provincial and regional levels of income inequality in China

Abstract

China has made significant strides in combating energy poverty by allocating funds to provide households with solar photovoltaic (SPV) systems. SPV technology improves living standards and reduces income inequality. Accordingly, this study initiates a new discussion by evaluating the role of SPV policy in reducing income inequality in China by narrowing the rural income gap. Firstly, we find income inequality using rural and urban income ratios. Secondly, we assess income inequality and solar photovoltaic trends over the years at the provincial and regional levels (using spatial graphs). Similarly, the study carried out a mediation analysis of the effects of SPV and economic growth on income inequality. This study examines the trend of photovoltaic prices in China over time and evaluates their impact on SPV power generation. China has witnessed a significant increase in SPV power generation, particularly after 2014, which coincides with a reduction in income inequality. However, income inequality still exists significantly as Qinghai, Tibet, Yunnan, Gansu, Guizhou, and Shaanxi have higher income inequality ranges between 2.78 and 3.38. The results further conclude that SPV policy's combined effects positively increase household income and reduce income inequality.