How to promote sustainable adoption of residential distributed photovoltaic generation in China? An employment of incentive and punitive policies

The development of residential solar photovoltaic has not achieved the desired target albeit with numerous incentive policies from Chinese government. How to promote sustainable adoption of residential distributed photovoltaic generation remains an open question. This paper provides theoretical explanations by establishing an evolutionary game model between governments and residents, and casts light on the effect of hybrid incentive and punitive policies on residents’ decision-makings and system evolutions. Specifically, four hybrid schemes, namely, static subsidy and static taxation, dynamic subsidy and static taxation, static subsidy and dynamic taxation, dynamic subsidy and dynamic taxation, are mathematically analyzed under the framework of evolutionary game. Case study of China demonstrates that current incentive policies cannot yield sustainable residential PV adoption in the long term. An employment of dynamic subsidies and static taxation is the most effective and feasible policy scheme in stabilizing the PV development pattern among residents and governments. Furthermore, we analyze the influence of coal-fired electricity price and taxation level fluctuation under the most preferred policy scheme. This study provides an insight into how to promote residential solar PV’s long-term development and contributes to provide implications for policy-makers in the enforcement of green electricity.