Distributed photovoltaic generation has advantages in energy savings and emissions reduction, but its economic value is still unclear. This paper examines the carbon value of distributed photovoltaic generation, analyzes the influencing factors and further illustrates how these factors affect the value. First, it introduces the method of carbon asset valuation to distributed photovoltaic generation, which produces lower carbon emissions than most other energy sources. Second, based on mean estimates of the internal determining factors for the carbon assets of distributed photovoltaic generation, this paper provides an estimated value of the carbon assets. Third, under uncertain conditions and accounting for the time factor, it uses Monte Carlo simulation to analyze the sensitivity of the carbon asset value of distributed photovoltaic generation. The results indicate that (1) distributed photovoltaic generation has a carbon asset value; (2) the carbon asset value of distributed photovoltaic generation is determined by the carbon reduction level, the power generation capacity and the carbon price; and (3) carbon price fluctuations affect the carbon asset value of distributed photovoltaic generation much more than the power generation capacity. This paper provides academic support to promote carbon asset trading in distributed photovoltaic generation and for distributed photovoltaic generation to reduce carbon emissions.

Introduction

Distributed photovoltaic generation has received considerable attention recently, as it plays an increasingly important role in energy savings and emissions reduction. Distributed photovoltaic generation serves the current demand for not only electrical energy but also increased electrified heating, cooling and transport, so it has sound advantages for achieving the sustainability objectives of energy policy at low cost (Hancevic et al., 2017; Bell and Gill, 2018). Driven by technological advancements and policy encouragement, distributed photovoltaic generation has had developed rapidly in China in recent years (Dong et al., 2016; Nerini et al., 2016; Anaya and Pollitt, 2017; Feng et al., 2017; He et al., 2017). Its cumulative installed capacity reached 6.06 GW at the end of 2015, and the average annual increase will be 12.79 GW during the 13th Five-Year Plan of China, which implies that there is a very substantial development space for distributed photovoltaic generation in the future. Although the economic value of distributed photovoltaic generation is recognized, and it has developed rapidly in many countries such as China, its potential environmental value in energy savings and emission reduction is still very ambiguous (Holtmeyer et al., 2013; Zhao et al., 2015; Brouwer et al., 2016; Luo et al., 2016). To analyze the potential environmental value of distributed photovoltaic generation, this paper applies the theory of carbon asset valuation advanced by Han et al. (2015) to value the carbon asset of distributed photovoltaic generation. We further analyze the influencing factors on the carbon asset value of distributed photovoltaic generation and illustrate how these factors affect the value. Carbon assets refer to the economic and environmental value of carbon reduction in all green production or consumption processes, so such assets are quite extensive. However, the study of carbon assets is limited to only a few fields; to the best of our knowledge, there are still no specific studies on the carbon asset value of distributed photovoltaic generation. Because distributed photovoltaic generation provides considerable benefits with regard to energy conservation and carbon reduction, its carbon asset value should be considered. This paper examines the carbon asset value of distributed photovoltaic generation, which will contribute to the understanding of the economic and environmental effects of distributed photovoltaic generation and the literature on the assessment of carbon assets’ value. According to Han et al. (2015), the value of carbon assets depends on the abetment ability of the project, its production amount and the carbon price in the market.