As global energy transitions accelerate, distributed photovoltaics have become a cornerstone of China’s rural energy transformation, shifting many rural households from passive energy consumers to active prosumers.
A research team from the School of Economics of Shandong Technology and Business University has developed a multi-agent dynamic game model to analyze how key stakeholders in nationally distributed PV systems interact and make strategic decisions.
The model focuses on four core stakeholders in the rural PV ecosystem: village organizations, PV companies, grid companies and rural households, capturing their different incentives and constraints within a unified analytical framework.
“The nationwide distributed PV ecosystem is a complex network of interactions,” says corresponding author Songlin Tang. “Our model captures the heterogeneity of rural households and the critical role of network firms, filling gaps in previous research that overlooked these key factors.”
Scenario simulations using the model provided three key insights for rural PV development, starting with the importance of collaboration between PV companies and village organizations to promote the surplus electricity input model.
The analysis indicates that rural households with low electricity demand prefer a full feed-in model where all electricity generated is supplied to the electricity grid, while households with higher demand prefer the surplus feed-in approach that supports own consumption in addition to sales via the electricity grid.
A second finding warns that aggressive promotion of the excess electricity import model can increase the risk of curtailment, especially when grid capacity and household demand are not aligned with growing installed capacity.
“Increasing self-consumption requirements helps reduce waste, but can also limit total installed capacity,” Tang explains. “Finding the right balance is essential for efficient energy use.”
The third key finding highlights that rising rural household incomes support greater investments in excess electricity supply in projects, but physical network capacity ultimately limits the efficiency and scale of these investments.
According to the study, grid improvements that are not accompanied by a corresponding growth in electricity demand lead to inefficient use of capital, reinforcing the conclusion that grid capacity remains the decisive factor for long-term development.
The researchers tested multiple strategy combinations and found that PV companies generally achieve higher profitability through equipment sales rather than direct long-term project investments in rural areas.
Village organizations benefit more if they work closely with PV companies on promotion and project organization, using their local knowledge to reduce information asymmetry and accelerate adoption among households.
Sensitivity analyzes in the study show that both household income and network upgrade costs play a crucial role in shaping adoption patterns, investment choices and curtailment risks across different types of households.
Higher-income households are more willing to invest in PV systems under the surplus feed-in model, while low-income households that adopt this model are more likely to curtail because their lower electricity demand exposes more excess energy to grid constraints.
“The study provides a scientific basis for policy design,” Tang said. “We recommend deepening cooperation among village enterprises, establishing dynamic self-consumption mechanisms based on network capacity, and implementing regionally differentiated development strategies.”
The team expects that targeted cooperation mechanisms can help tailor project structures to local conditions, including differences in income levels, tax profiles and networking opportunities between rural regions.
Looking ahead, the researchers plan to expand the game model to include evolving policy subsidy frameworks and the increasing role of energy storage technologies in smoothing out generation-demand mismatches.
They also aim to conduct empirical testing in specific rural areas, using real-world project data to validate and refine the model’s assumptions and to better translate theoretical findings into practical recommendations for rural energy planners.
This research was supported by the General Project of the National Social Science Fund of China, “Research on the Pathway of Rural Energy Transition in China from the Prosumer Perspective” (21BJY113), and by the Scientific Research Start up Fund Project of Shandong Technology and Business University, “Mechanism and Pathway of Low carbon Transition in the Power Sector from a Regional Coordination Perspective” (306657).
Research report:Investigating the behavioral mechanisms of rural distributed photovoltaic development: a prosumer perspective view
