Investment Decision Models In Architectural Application Project Of Renewable Energy

As green building development and promotion, construction industry has entered the times of reducing carbon emissions and reducing the impact on the environment. Application of renewable energy technologies in buildings become a hot research of scholars and research institutions in recent years. But research at home and abroad mainly focused on exploitation of renewable energy technology, policy advice, etc., less for renewable energy projects of technical and economic evaluation studies. Despite the non-economic factors are key of energy decision-making, but when it comes to economic interests, investors have to allocate financial resources to the project of highest return on investment, because the investment in renewable energy projects require substantial implementation costs. The real options model in investment decisions on renewable energy also has disadvantages:(1)the current real option volatility is represented by historical or hypothetical volatility. However, these methods do not reflect the future volatility of the overall value of investment projects. They use in renewable energy investment evaluation will cause an error. There is an urgent need for a method to systematically assess renewable energy projects real option volatility. Current literature primarily through calculating investment option value to determine whether the project is worth the investment, Not determined at what energy prices, the investmentor can invest renewable energy systems. There is an urgent need for a way to define a suitable investment opportunity.Against the limitations of the current model of real option theory, this paper create a new real options model to evaluate investment selection in renewable energy projects under uncertain conditions this research has three primary contribution:(1) Constructing the trinomial tree Options pricing model to describe uncertainty of renewable energy projects efficiency;(2) Proposing a method to account for uncertainty about investment value of the project by the Monte Carlo simulation method;(3)Identifying the best time to invest renewable energy projects in buildings and determining the corresponding investment option value. It is expected that this work will contribute to making hard energy investment decisions in construction engineering and management green building, achieving ambitious goals for the adoption of renewable energy.There is important theoretical and practical significance to promote the development and utilization of renewable energy.