Economic analysis of whole-county PV projects in China considering environmental benefits

Abstract

Distributed photovoltaic generation is an important measure to address climate change and boost rural revitalization. In the context of new energy grid parity, driving rooftop distributed photovoltaics to participate in the green power trading market is an inevitable necessity for energy and market development. Thus, based on the cost-benefit theory, this paper considers both the green power trading market and the carbon trading market in an integrated manner and develops an economic efficiency model that takes taxation into account. The net present value (NPV), dynamic payback period (DPP) and internal rate of return (IRR) were chosen for the economic feasibility analysis, comparing green power trading with whole power carbon trading, and sensitivity analysis. An analysis of a whole-county rooftop DPVG pilot in Northeast China as an example shows that the whole-county rooftop DPVG project is economically viable. After participating in green power trading, the NPV reaches $5956.083 thousand, IRR is 13.629 % and DPP is shortened from 21.517 years to 14.248 years, fully reflecting the value of the environmental attributes of green power. In addition, sensitivity analysis shows that the green power trading price and the self-consumption contract tariff are non-negligible factors, and it is proposed that the green power trading price awaits enhancement. Finally, relevant policy recommendations to promote the development of whole-county DPVG are put forward. The findings of the study provide new directions for the scaled development of new energy sources, as well as effective references for investment decision-makers.