Abstract
This paper provides a real option approach to analyze investment value for photovoltaic power generation under carbon market linkage. The primary purpose is to evaluate photovoltaic power generation under uncertainties from the perspective of power generation enterprises. Uncertainties in investment costs, electricity prices, carbon prices and subsidy payments are considered. In addition, the Market Co-movements of investment costs are considered in this study. Dunhuang is taken as a case study to evaluate the value of photovoltaic power generation through scenario analysis. The result shows that the investment value of photovoltaic power generation is negative. Enterprise should give up the investment or delay investment until mature conditions. Moreover, the investment value can be improved by technical improvement, increasing a certain range of subsidy payments, etc. The research presented would be useful for photovoltaic power generation project evaluation and related decision-marking.
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