Optimal selection of financing strategy in power grid innovation project considering tax saving benefit

In terms of financing for power grid innovation project,the utilities should choose an appropriate financing model to reduce the cost and gain more benefit.The tax revenue policies of financing lease are analysed firstly.Then the model is established to calculated the net present income value in financing release.Through comparison with loan financing,the tax saving benefit of financing lease is studied and conclusions are drawn as follows: the net present income value of financing lease is a decreasing function of financing period,while it is an increasing function of financing period in case of loan financing.There is a critical value by which the income of the two financing models are the same.When the financing period is less than the critical value,financing lease is superior to loan.While the loan financing is preferred if the financing period is longer than that.Finally the conclusion is verified through an example.