Research on Income evaluation of photovoltaic agricultural investment model based on fuzzy real option

Binjie Wang; Yang Fu

doi:10.54691/bcpbm.v25i.1884

Authors

Binjie Wang
Yang Fu

DOI:

https://doi.org/10.54691/bcpbm.v25i.1884

Keywords:

Photovoltaic agriculture, Fuzzy number, Real options, Project valuation, Investment decisions, Monte Carlo simulation

Abstract

With the proposal of emission peak and carbon neutrality, in view of the actual development of China's energy economy , photovoltaic agriculture becomes an important means to promote the economic development of poor and remote areas. Aiming at the investment modes of photovoltaic agriculture projects such as agricultural land leasing and farmers' participation in investment, this paper constructs a fuzzy real option investment model, and uses Monte Carlo simulation method to evaluate and analyze the income of both photovoltaic power generation project modes. The research shows that compared with the traditional real option income evaluation, the fuzzy real option model is more suitable for the investment evaluation of photovoltaic power generation project modes, and the project with farmers’ participation has higher returns. The income evaluation results show that the best time to benefit from the photovoltaic power generation project is in the next seven years or so, which provides reference for policy guidance and investment decision-making, and helps to promote the development of photovoltaic agriculture projects.

Downloads

Download data is not yet available.

References

Black F, Scholes M. The pricing of options and corporate liabilities[J]. Journal of Political Economy, 1973(81): 637-654.

Merton R C. Theory of rational option pricing[J]. The Bell Journal of Economics and Management Science, 1973: 141-183.

Myers S C. Determinants of corporate borrowing[J]. Journal of Financial Economics, 1977(5): 147-175.

Carlsson C, R Fullér. A fuzzy approach to real option valuation[J]. Fuzzy Sets and Systems, 2003, 139( 2):297-312.

Wu H C. Pricing European options based on the fuzzy pattern of Black-Scholes formula[J]. Computers & Operations Research, 2004, 31(7):1069-1081.

Zhao Zhenwu, Tang Wansheng. Journal of Beijing Institute of Technology: Social Science edition, 2006, 8(1):3.

Thiagarajah K, Appadoo S S, Thavaneswaran A. Option valuation model with adaptive fuzzy numbers[J]. Computers & Mathematics with Applications, 2007, 53(5):831-841.

Ho S H, Liao S H. A fuzzy real option approach for investment project valuation[J]. Expert Systems with Applications, 2011, 38(12):15296-15302.

Lee Y C, Lee S S. The valuation of RFID investment using fuzzy real option[J]. Expert Systems with Applications, 2011, 38(10):12195-12201.

Liu Xiaojing, Zou Tao, Chen Yanying Research on investment opportunity of enterprise design innovation based on real option theory [J] Financial theory and practice, 2015,36 (01): 64-67.

Kim, Y., Lee, EB. Optimal Investment Timing with Investment Propensity Using Fuzzy Real Options Valuation. Int. J. Fuzzy Syst. 20, 1888–1900 (2018).

Wang Xiandong Research on investment decision of R & D project based on fuzzy compound real option method [J] Journal of Changzhou Institute of technology, 2020, 33 (05): 42-47.

Tian Lixin, Xu Peilin, Fu min Evaluation of China's wind power development policy based on real options [J] Journal of management, 2013,10 (02): 266-273.

Zhang Mingming, Zhou Dequn, Zhou Peng Investment evaluation of photovoltaic power generation projects in China based on real options [J] Journal of Beijing University of Technology (Social Science Edition), 2014,16 (06): 26-33.

Lee H W, Choi K, Gambatese J A, et al. Financial Valuation for Commercial Energy Retrofits under Private Risks[C]// Construction Research Congress 2014. 2014.

Wang S . Investment Decision-Making on Renewable Energy Based on Improved Real Option Model[J]. Metallurgical & Mining Industry, 2016.

Passos A C, Street A, Barroso L A. A Dynamic Real Option-Based Investment Model for Renewable Energy Portfolios[J]. IEEE Transactions on Power Systems, 2017, 32(2):1-1.

Lin Qing Research on value evaluation of biomass energy project based on fuzzy real option [D] Hunan University, 2016.

Yang Xiaoping, Yang Fan Investment decision of wind power generation side energy storage based on real option [J] Modern power, 2021,38 (04): 442-448.

Sarkis J, Tamarkin M. Real options analysis for renewable energy technologies in a GHG emissions trading environment[M]//Emissions trading. Springer, New York, NY, 2008: 103-119.

ERSEN H Y, Oktay T A S. FUZZY REAL OPTION VALUATION MODEL USING TRINOMIAL LATTICE APPROACH AND ITS PROPERTY CONSTRUCTION INVESTMENT APPLICATION[J]. PressAcademia Procedia, 6(1): 19-23.

Zadeh, L. A. (1965). Fuzzy sets. Information and Control, 8(3), 338–353.