Study on household investment decision of household photovoltaic project promotion -- based on inclusive finance perspective

Abstract

Considering the lack of research on households' investment decisions in promoting photovoltaic projects in existing studies, this study constructs a four-party evolutionary game model based on local governments, financing institutions, photovoltaic enterprises and households from the perspective of inclusive finance. In addition, according to the influence of irrational psychological factors on the decision-making outcome of each interested party in decision-making, this study innovatively introduces regret theory to improve the evolutionary game model. Then, each subject' evolutionary stabilization strategies and system equilibrium points are analysed explicitly using the perceived benefit function and the replicated dynamic differential equation. Finally, combined with the system dynamics method, the theoretical derivation results are verified by parameter assignment, and the sensitivity of each subject to multiple influencing factors is explored. The results show that: (1) under the current market condition, the system is stabilized in the strategy combination of Case I (subsidy, conventional finance, non-promotion, loan to build), but the ideal state can be achieved through the refinement and adjustment of policies. And there is a mutual influence between the subjects. (2) The regret-elation perception psychology of each subject has a non-negligible influence on their decision-making behaviour. The combination of strategies in Case I is a conservative decision by the subjects. (3) A variety of factors influences the behavioural decisions of each subject, and the amount of rent that photovoltaic enterprises can provide is a crucial factor affecting households' investment decisions. (4) Local governments incentives and penalties play a key incentive role in promoting the active participation of financing institutions and photovoltaic enterprises in the promotion endeavour. This study provides practical guidance and policy insights for promoting the diffuse use of renewable energy and the promotion of household photovoltaic projects while enriching the applied research by combining regret theory and evolutionary game theory.