An analysis on investment policy effect of China's photovoltaic industry based on feedback model

China's photovoltaic industry developed sharply, and now it is the only country whose production covers the installed. Since R&D policy and deployment policy of China's PV industry should not increase its production, this paper focuses on impact of investment policy, regarded as subsidy, on the photovoltaic industry. Feedback model of China's photovoltaic industry is built, and the parameters of the model were estimated. And then simulation is done based on the model. The results show that the expansion is mainly caused by overreaction to the potential of the industry, but not the investment policy. In fact, investment policy only causes price fluctuations and industry overcapacity to some extent. Therefore, China's investment policy on PV industry investment should be reduced properly or even canceled, or at least it should be combined with deployment and R&D. (C) 2014 Elsevier Ltd. All rights reserved.