Photovoltaic Smart Grids in the prosumers investment decisions: a real option model

The digitization of power system represents one the main instruments to achieve target set by European Union 2030 climate and energy Agenda affordable transition. During last years, such innovation process has been associated with Smart Grid (SG) term. In this context, efficiency flexibility systems are expected increase consumers be active also on production side, thus becoming prosumers (agents that both produce consume energy). This paper provides a theoretical real option framework aim model prosumers’ decision invest in photovoltaic plants, assuming they integrated SG. Our focus is study optimal plant size investment threshold, context where exchange among possible. was calibrated tested data from Northern Italy market. findings show possibility selling between prosumers, via SG, increases values. opportunity encourages larger compared case without there positive relation (optimal) timing. effect uncertainty line literature, showing increasing value defer volatility. comparative statics stress need for policies push PV efficiency.