Research on the investment decisions of PV micro‐grid enterprises under carbon trading mechanisms

Abstract

Abstract Achieving carbon neutrality targets requires substantial financial support. Effective utilization of renewable energy is an essential means of promoting energy‐saving and emission reduction to realize a green and circular economy. This paper combines carbon trading mechanisms with the operational mode of Chinese micro‐grid enterprises. This method uses the real options theory to construct an investment decision model for photovoltaic (PV) micro‐grid enterprises. The study aims to analyze the impact of carbon trading revenue on a numerical simulation of PV micro‐grid enterprise investment decisions. The findings demonstrate that when projected growth rates, volatility standard deviations, and risk‐free interest rates rise in the carbon trading market, the carbon price threshold rises, causing businesses to seek out investment opportunities with higher future carbon prices. The increase of micro‐grid generation technology acceptance probability, the availability of resources to meet generation investment requirements, and the generation project cycle will decrease the carbon price threshold and accelerate enterprise investment. Studying the influence of carbon trading prices on micro‐grid investment has specific guidance and practical significance for future government subsidy policies and the investment strategies of grid enterprises.

Keywords

• carbon trading mechanism
• investment decision
• PV micro‐grid
• real option theory
• renewable energy