Research On PV Subsidies Of China Considering Regional Differences And The Impact On Valuation

Energy crisis has raised attention of the whole world.In order to reduce the pollution due to fossil fuel and ease the problem of energy shortage,governments established policies to develop renewable energy.As an important and competitive part of renewable energy,photovoltaic(PV)industry has been developed fast in recent years.As a country with huge energy consumption,China has taken several subsidy policies to boost PV industry.However,there is certain room to be improved for the subsidy policy.The mainland of China has 31 provinces and municipalities(PM),and the economic condition,environmental resources and energy structure of 31 PM are significantly different,which leads to discrepancy of PV efficiency among regions.For this situation,the current subsidy policy is not efficient enough.Based on the theory of fairness and efficiency of energy subsidy,the paper proposes that subsidies for PV industry should be given based on PM's economic condition,energy efficiency,and environmental responsibility.We builds 19 evaluating indicators involving economic,environmental and energy factors,allocates weights to 19 indicators using entropy weight method,and sort 31 evaluating objects through TOPSIS method.From this empirical study,we obtain subsidy proportion for each PM.Then we discussed impact of new subsidy policy on the valuation of PV public companies since subsidy is a significant part of those companies' revenue,the changing of subsidy will attributes variation of their valuation based on Efficient Market Theory.