Solar energy projects contribute to smart city goals by reducing pollution and assisting cities to become self-sustaining. However, these projects, characterised by their sequential nature, require a huge amount of irreversible investment, especially in the case of large-scale photovoltaic projects (MW). This aspect could make solar projects unattractive for potential investors. To mitigate the risks of financial losses the investor could invest in small-scale solar projects and switch to large-scale investment projects only if the market conditions are favourable. This paper aims to embed this managerial flexibility of changing investment size during the project lifetime into its valuation. To accomplish this, we use a compound options approach with a switch and call options models to reliably price these projects by considering their riskiness and, their stochastic and multi-stage nature. We also consider the determination of the optimal investment time like an American option. We also propose a case study that shows that considering the managerial flexibility value in the project valuation makes them attractive and financially profitable.

太阳能项目通过减少污染和帮助城市实现自我维持，为实现智慧城市目标做出贡献。然而，这些项目具有连续性的特点，需要大量的不可逆转的投资，特别是在大型光伏项目（MW）的情况下。这方面可能会使太阳能项目对潜在投资者没有吸引力。为了减轻财务损失的风险，投资者可以投资小型太阳能项目，只有在市场条件有利时才转向大型投资项目。本文旨在将这种在项目生命周期内改变投资规模的管理灵活性嵌入到其估值中。要做到这一点，我们使用带有转换和看涨期权模型的复合期权方法，通过考虑它们的风险以及它们的随机性和多阶段性质来可靠地定价这些项目。我们还考虑了像美式期权一样的最佳投资时间的确定。我们还提出了一个案例研究，该案例研究表明，在项目估值中考虑管理灵活性价值使其具有吸引力并具有财务利润。