ABSTRACT The commercialization of vehicle-to-grid (V2G) technology is critically hindered by the absence of a cost-effective and user-acceptable incentive mechanism, which limits electric vehicles (EVs) users’ willingness to participate in grid dispatch. To address this issue, this paper thoroughly designs the optimal V2G incentive from a policy-making perspective, based on real-world data from Zhejiang Province, China. The methodology involves: 1) defining the lower and upper limits of V2G incentive from user and utility perspectives; 2) categorizing V2G application scenarios (industrial parks, residential communities, public parking lots) and designing each business schemes; 3) constructing optimization models and performing Monte Carlo simulations; 4) conducting a social experiment in Zhejiang Province, China, to modeling user participation willingness based on real data. The quantitative results indicate that the optimal V2G incentives are 0.71 CNY/kWh for industrial parks, 0.77 CNY/kWh for residential communities and 0.32 CNY/kWh for public parking lots. A unified policy incentive is derived as 0.75 CNY/kWh through welfare weighting. Sensitivity analysis reveals that while the power source mix and V2G technology cost have limited impacts, advancements in power battery technology, higher time-of-use tariff differentials and increased subsidies can enhance overall welfare. Furthermore, improved power supply reliability and larger EVs numbers can reduce the optimal V2G incentive, projecting a decline to 0.30 CNY/kWh by 2029.