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As global climate change intensifies and environmental awareness increases, investing in renewable energy has become a primary economic and social development priority. Photovoltaic (PV) projects, as a clean and sustainable energy technology, have garnered significant attention due to their notable environmental and economic benefits. However, traditional investment evaluation methods such as net present value (NPV) analysis fail to adequately capture the flexibility and future uncertainties inherent in PV project investments. This paper presents a case study analysis proposing a delay option model that incorporates environmental, social, and governance (ESG) factors, providing a more scientific and flexible investment decision framework for PV projects. The case study results indicate that considering ESG factors significantly enhances the investment value of PV projects. This model not only provides comprehensive support for PV project investment decisions but also underscores the importance of establishing stringent carbon trading markets and policy incentive mechanisms to promote the widespread adoption and sustainable development of renewable energy projects.
Wei et al. (2024) studied this question.