What are the investment risk differences of solar PV power generation projects between constructional and operational periods? An empirical study in China

Purpose Under the pressure of environment degradation and energy consumption rises, solar photovoltaic power generation (SPPG) has been seen as a strategic emerging industry in China. However, the SPPG projects have many uncertain factors in the process of the life cycle. The purpose of this paper is to evaluate the investment risk comprehensively. Design/methodology/approach Specifically, this paper firstly identified the risk factors and consequences of SPPG project investment and constructed the investment risk factor evaluation index system. Secondly, the factor analysis method was used to reveal the key investment risk factors and risk consequences. Then, the research hypotheses and conceptual model were proposed, and the empirical analysis was conducted based on the structural equation model (SEM). Findings The results showed that the six key risk factors (political, economic, technological, management, market and natural) have a significant impact on the risks during the whole period. The influence degree of risk factors in the operational period is such that market factor > political factor > economic factor > management factor > natural factor > technical factor. In addition, the risk of constructional period has a significant impact during the risk of operational period. Except for natural factors, all risk factors are correlated among the mutual influence relationship of risk factors. Finally, this paper puts forward management implications based on the above conclusions: effectively identify investment risk factors and comprehensively improve risk management ability; (refine the risk factors of SPPG project investment and develop targeted risk prevention and control strategies; define risk management objectives and make relevant strategic plans. Research limitations/implications Because of the chosen research approach, the research results may lack generalisability. Therefore, researchers are encouraged to test the proposed propositions further. Practical implications It can also help stakeholders propose risk prevention strategies throughout the entire process, to promote the sustainable development of SPPG projects. Originality/value This study focuses on the investment risk of SPPG projects, by building an evaluation index system to identify key risk factors, and then establishes a SEM covering constructional period risks and operational period risks to better explore SPPG project risks, in an effort to reveal the mutual influence relationship and influence path of investment risk factors of the projects.