To achieve the energy transition and carbon neutrality targets, governments have implemented multiple policies to incentivize electricity suppliers to invest in renewable energy. Considering different government policies, we construct a renewable energy supply chain consisting of electricity suppliers and electricity retailers. We then explore the impact of four policies on electricity suppliers’ renewable energy investments, environmental impacts, and social welfare. We validated the results based on data from Wuxi, Jiangsu Province, China. The results show that government subsidy policies are more effective in promoting electricity suppliers to invest in renewable energy as consumer preferences increase, while no-government policies are the least effective. We also show that electricity suppliers are most profitable under the government subsidy policy and least profitable under the carbon cap-and-trade policy. Besides, our results indicate that social welfare is the worst under the carbon cap-and-trade policy. With the increase in carbon intensity and renewable energy quota, social welfare is the highest under the subsidy policy. However, the social welfare under the renewable energy portfolio standard is optimal when the renewable energy quota is low.

Adib, R., Murdock, H. E., Appavou, F., et al. (2016). Renewables 2016 Global Status Report: Global Status Report Renewable Energy Policy Network for the 21st Century (REN21). Available online: https://ren21.net/gsr-2016/00-acknowledgements.php (accessed on 30 October 2022).

Al-Barakati, A., Mishra, A. R., Mardani, A., et al. (2022). An extended interval-valued Pythagorean fuzzy WASPAS method based on new similarity measures to evaluate the renewable energy sources. Applied Soft Computing, 120, 108689. https://doi.org/10.1016/j.asoc.2022.108689

Amin, W., Huang, Q., Afzal, M., et al. (2020). Consumers’ preference based optimal price determination model for P2P energy trading. Electric Power Systems Research, 187, 106488. https://doi.org/10.1016/j.epsr.2020.106488

Atakan, S., Gangammanavar, H., & Sen, S. (2022). Towards a sustainable power grid: Stochastic hierarchical planning for high renewable integration. European Journal of Operational Research, 302(1), 381–391. https://doi.org/10.1016/j.ejor.2021.12.042

Babich, V., Lobel, R., & Yücel, Ş. (2020). Promoting Solar Panel Investments: Feed-in-Tariff vs. Tax-Rebate Policies. Manufacturing & Service Operations Management, 22(6), 1148–1164. https://doi.org/10.1287/msom.2019.0860

Bae, J. H., Rishi, M., & Li, D. (2021). Consumer preferences for a green certificate program in South Korea. Energy, 230, 120726. https://doi.org/10.1016/j.energy.2021.120726

Bangjun, W., Feng, Z., Feng, J., et al. (2022). Decision making on investments in photovoltaic power generation projects based on renewable portfolio standard: Perspective of real option. Renewable Energy, 189, 1033–1045. https://doi.org/10.1016/j.renene.2022.02.112

Chaikumbung, M. (2021). Institutions and consumer preferences for renewable energy: A meta-regression analysis. Renewable and Sustainable Energy Reviews, 146, 111143. https://doi.org/10.1016/j.rser.2021.111143

Chen, Z., Xiao, X., & Nie, P. (2020). Renewable energy hybrid subsidy combining input and output subsidies. Environmental Science and Pollution Research, 28(8), 9157–9164. https://doi.org/10.1007/s11356-020-11369-9

China Carbon Cap-and-Trade Market. (n.d.). China Carbon Cap-and-Trade Market. Available online: http://www.tanjiaoyi.org.cn/ (accessed on 25 October 2023).

Colasante, A., D’Adamo, I., & Morone, P. (2021). Nudging for the increased adoption of solar energy? Evidence from a survey in Italy. Energy Research & Social Science, 74, 101978. https://doi.org/10.1016/j.erss.2021.101978

CPG. (n.d.). Energy data sharing platform. Available online: http://www.nengyuanyan.com/ (accessed on 25 October 2023).

Evensen, D. (2017). Renewable energy policy: Enumerating costs reduces support. Nature Energy, 2(8). https://doi.org/10.1038/nenergy.2017.106

Fan, R., Bao, X., Du, K., et al. (2022). The effect of government policies and consumer green preferences on the R&D diffusion of new energy vehicles: A perspective of complex network games. Energy, 254, 124316. https://doi.org/10.1016/j.energy.2022.124316.

Heeter, J. S., Speer, B. K., & Glick, M. B. (2019). International Best Practices for Implementing and Designing Renewable Portfolio Standard (RPS) Policies. Office of Scientific and Technical Information (OSTI). https://doi.org/10.2172/1507986

IEA. (2022). World Energy Outlook 2022. Available online: https://www.iea.org/reports/world-energy-outlook-2022 (accessed on 30 October 2022).

Itaoka, K., Chapman, A., & Farabi-Asl, H. (2022). Underpinnings of consumer preferences and participation in Japan’s liberalized energy market. Utilities Policy, 76, 101379. https://doi.org/10.1016/j.jup.2022.101379

Kesari, B., Atulkar, S., & Pandey, S. (2018). Consumer Purchasing Behaviour towards Eco-Environment Residential Photovoltaic Solar Lighting Systems. Global Business Review, 22(1), 236–254. https://doi.org/10.1177/0972150918795550

Kök, A. G., Shang, K., & Yücel, Ş. (2018). Impact of Electricity Pricing Policies on Renewable Energy Investments and Carbon Emissions. Management Science, 64(1), 131–148. https://doi.org/10.1287/mnsc.2016.2576

Kök, A. G., Shang, K., & Yücel, Ş. (2020). Investments in Renewable and Conventional Energy: The Role of Operational Flexibility. Manufacturing & Service Operations Management, 22(5), 925–941. https://doi.org/10.1287/msom.2019.0789

Koponen, K., & Le Net, E. (2021). Towards robust renewable energy investment decisions at the territorial level. Applied Energy, 287, 116552. https://doi.org/10.1016/j.apenergy.2021.116552

Liu, H., Kou, X., Xu, G., et al. (2021). Which emission reduction mode is the best under the carbon cap-and-trade mechanism? Journal of Cleaner Production, 314, 128053. https://doi.org/10.1016/j.jclepro.2021.128053

Liu, Z., Anderson, T. D., & Cruz, J. M. (2012). Consumer environmental awareness and competition in two-stage supply chains. European Journal of Operational Research, 218(3), 602–613. https://doi.org/10.1016/j.ejor.2011.11.027

Masrahi, A., Wang, J.-H., & Abudiyah, A. K. (2021). Factors influencing consumers’ behavioral intentions to use renewable energy in the United States residential sector. Energy Reports, 7, 7333–7344. https://doi.org/10.1016/j.egyr.2021.10.077

National Energy Administration (NEA). (2019). Notice of the State Energy Administration on establishing and improving the guarantee mechanism of renewable energy power consumption. Available online: http://zfxxgk.nea.gov.cn/auto87/201905/t20190515 _3662.htm (accessed on 30 October 2022).

National Energy Information Platform. (n.d.). National Energy Information Platform. Available online: http://pt.people-energy.com.cn/ (accessed on 25 October 2023).

National Energy Network. (n.d.). National Energy Network. Available online: http://www.ocpe.com.cn/ (accessed on 25 October 2023).

Niamir, L., Ivanova, O., Filatova, T., et al. (2020). Demand-side solutions for climate mitigation: Bottom-up drivers of household energy behavior change in the Netherlands and Spain. Energy Research & Social Science, 62, 101356. https://doi.org/10.1016/j.erss.2019.101356

Sendstad, L. H., Hagspiel, V., Mikkelsen, W. J., et al. (2022). The impact of subsidy retraction on European renewable energy investments. Energy Policy, 160, 112675. https://doi.org/10.1016/j.enpol.2021.112675

Statistical Review of World Energy. (2021). Webcast archive. Available online: https://www.bp.com/en/global/corporate/energy-economics/webcast-and-on-demand.html#tab_2021 (accessed 30 October 2022).

Tsao, Y. C., Vu, T. L., & Lu, J. C. (2021). Pricing, capacity and financing policies for investment of renewable energy generations. Applied Energy, 303, 117664. https://doi.org/10.1016/j.apenergy.2021.117664

Umit, R., Poortinga, W., Jokinen, P., et al. (2019). The role of income in energy efficiency and curtailment behaviours: Findings from 22 European countries. Energy Research & Social Science, 53, 206–214. https://doi.org/10.1016/j.erss.2019.02.025

Venugopal, A., & Shukla, D. (2018). Identifying consumers’ engagement with renewable energy. Business Strategy and the Environment, 28(1), 53–63. https://doi.org/10.1002/bse.2185

Wall, R., Grafakos, S., Gianoli, A., et al. (2018). Which policy instruments attract foreign direct investments in renewable energy? Climate Policy, 19(1), 59–72. https://doi.org/10.1080/14693062.2018.1467826

Wang, L., & Li, K. (2022). Research on renewable energy consumption and emission reduction in power market based on bi-level decision making in China. Energy, 260, 125119. https://doi.org/10.1016/j.energy.2022.125119

Wei, C., Li-Feng, Z., & Hong-Yan, D. (2021). Impact of cap-and-trade mechanisms on investments in renewable energy and marketing effort. Sustainable Production and Consumption, 28, 1333–1342. https://doi.org/10.1016/j.spc.2021.08.010

Williams, R. H. (2001). Toward zero emissions from coal in China. Energy for Sustainable Development. 5, 39-65.

Xin-gang, Z., Yi, Z., Hui, W., et al. (2022). How can the cost and effectiveness of renewable portfolio standards be coordinated? Incentive mechanism design from the coevolution perspective. Renewable and Sustainable Energy Reviews, 158, 112096. https://doi.org/10.1016/j.rser.2022.112096

Yan, Y., Sun, M., & Guo, Z. (2022). How do carbon cap-and-trade mechanisms and renewable portfolio standards affect renewable energy investment? Energy Policy, 165, 112938. https://doi.org/10.1016/j.enpol.2022.112938

Yang, D., Chen, Z., & Nie, P. (2016). Output subsidy of renewable energy power industry under asymmetric information. Energy, 117, 291–299. https://doi.org/10.1016/j.energy.2016.10.089

Yang, X., He, L., Xia, Y., et al. (2019). Effect of government subsidies on renewable energy investments: The threshold effect. Energy Policy, 132, 156–166. https://doi.org/10.1016/j.enpol.2019.05.039

Yenipazarli, A. (2019). Incentives for environmental research and development: Consumer preferences, competitive pressure and emissions taxation. European Journal of Operational Research, 276(2), 757–769. https://doi.org/10.1016/j.ejor.2019.01.037

Zhang, L., Li, S., Hu, Y., et al. (2022). Economic optimization of a bioenergy-based hybrid renewable energy system under carbon policies—from the life-cycle perspective. Applied Energy, 310, 118599. https://doi.org/10.1016/j.apenergy.2022.118599

Zhang, Q., Wang, G., Li, Y., et al. (2018). Substitution effect of renewable portfolio standards and renewable energy certificate trading for feed-in tariff. Applied Energy, 227, 426–435. https://doi.org/10.1016/j.apenergy.2017.07.118

Zhu, Q., Chen, X., Song, M., et al. (2022). Impacts of renewable electricity standard and Renewable Energy Certificates on renewable energy investments and carbon emissions. Journal of Environmental Management, 306, 114495. https://doi.org/10.1016/j.jenvman.2022.114495