Analysis of investment and subsidy of rural household biogas pit

The biogas has good benefits in the aspects of supplying high quality energy, increasing household income and protecting ecological environment. In many cases, the benefit of biogas has externalities from the viewpoint of rural household. The paper analyzed various investment models including the possibilities of household investment and government subsidy, and pointed out that the government subsidy is necessary because of the shortage of farmer's investment and the externality of biogas.