Real options analysis for photovoltaic project under climate uncertainty

Abstract

The decision on photovoltaic project depends on the level of climate environments. Changes in temperature and insolation affect photovoltaic output. It is important for investors to consider future climate conditions for determining investments on photovoltaic projects. We propose a real options-based framework to assess economic feasibility of photovoltaic project under climate change. The framework supports investors to evaluate climate change impact on photovoltaic projects under future climate uncertainty.