The Decision Analysis Of PV Generation Investment And Market Linkage Development In Carbon Trading Market

In recent years, photovoltaic power generation has continue to rise and development in the world. Photovoltaic power generation has some differences with the traditional model, the resource of photovoltaic power generation is renewable, and the process of generation are clean and green. Currently, the photovoltaic power generation has still in the development stage in China, but it has attracted the attention of many companies. However, there have some uncertain risks in the photovoltaic power generation process, investors need to estimate the project carefully before invest in it. At present, the traditional financial analysis method has been used by many companies, such as net present value method(NPV). But there have some characteristics in the photovoltaic power generation project: the investment time is longer, the investment is irreversible, the investment have many uncertainties and the risk of investment is higher. As the NPV method does not consider the uncertainties in the investment process, it can not offer an accurate evaluation for photovoltaic power generation projects. The company may make the wrong decision and bring adversely affect by using the NPV method. Therefore, it has a certain value and significance in theory and practice that use a more accurate and appropriate methods for the analysis and decision-making of photovoltaic power generation.This paper analysis the uncertainty of photovoltaic power generation.Uncertainties in investment costs, electricity prices, carbon prices and subsidy payments were considered. In addition, the Market Co-movements of investment costs were considered in this study. The photovoltaic investment value model is established from the perspective of power generation enterprises. Uncertainties are described by Geometric Brownian motion in this paper, and get random motions and the option value of photovoltaic power generation project by using Monte Carlo simulation method. This paper takes a 10 MW photovoltaic power in Dunhuang as a case. In addition, this paper discusses the impact of investment cost, tariff, carbon price and subsidies for project in scenario analysis.Real Option Approach can make a precise assessment of photovoltaic power generation project. In addition, it provides a more accurate and flexible analysis tool for investor. It could help to decision-making and the construction and development of photovoltaic power generation project.