Abstract: With the development of renewable energy, a large amount of photovoltaic (PV) is connected to the distribution network, which causes the serious over-voltage problem. This paper proposes a method for household PV to participate in reactive power regulation to solve this problem, and studies the incentive and reward mechanism of PV reactive power based on the bargaining game theory. Firstly, a cooperative two-layer optimization model between the power grid and the users is constructed. The outer model optimizes the configuration of the reactive power compensation equipment with the goal of minimizing the overall annual cost, while the inner model optimizes the operation of the system with the goal of minimizing the network loss. The cooperation between the two generates the cooperation surplus. Then, based on bargaining game theory, the income distribution model of the power grid and the users is constructed, and a reasonable PV reactive power incentive and reward mechanism is established in this way, the cooperative surplus can be reasonably distributed between the power grid and the users, and the cooperative relationship between them maintains. Finally, an example is given to verify the effectiveness of the method and model proposed in this paper. The power grid and the users can effectively solve the system voltage overlimit problem through cooperation, which ensures the security and stability of the system operation and improves the profits of both sides.