As a targeted poverty alleviation policy, the photovoltaic poverty alleviation policy (PPAP) plays an important role to reduce rural poverty in China. An ex-post quantitative evaluation of the effectiveness of PPAP is crucial to improve the policy to further promote poverty reduction in China. Based on the panel data of 722 poor counties in China from 2013 to 2019, this paper builds a continuous spatial difference-in differences (SDID) model and quantitatively evaluates the effectiveness and transmission mechanism of PPAP on promoting economic growth of the poor counties in China. The results show that PPAP has a significant effect on the economic growth of poor counties. Specifically, the average growth rate of GDP per capita in the targeted poor counties increases by 0.43%-0.44% with per MW of solar PV capacity being installed. Meanwhile, as a result of the spillover effect of the policy, the average growth rate of GDP per capita in the neighboring poor counties increases by 0.14%-0.15%. Moreover, we find that such spillover effect will not be significant when the geographical distance among poor counties is larger than 650km. Thus, the total effect of the PPAP is estimated to be that, with per MW of solar PV capacity being installed the average growth rate of GDP per capita in all the poor countries will increases by between 0.57% and 0.59%, and accordingly the GDP increases by between 128.28 and 132.79 RMB. The heterogeneity analysis shows that the effect of PPAP seems more significant in China’s western, extreme poor counties and high-population density counties. In specific, with per MW of solar PV being installed, the growth rate of per capital GDP of western poor counties will be 0.23% higher than that of eastern poor counties, thegrowth rate of per capital GDP of extreme poor counties will be 0.38% higher than that of non-extreme poor counties and the growth rate of per capital GDP of western high-population density counties will be 0.30% higher than that of low-population density counties. The mechanism analysis shows that PPAP can promote the economic growth of poor counties via the employment effect, investment effect, consumption effect and economic structure effect. Specifically, with per MW of solar PV capacity being installed, the employment rate, the fixed asset investment, and the total retail sales of consumer goods will increase by 0.16%, 0.20% and 0.68%, and the proportion of primary industry will decrease by 0.10%, respectively. This study reveals the mechanism and policy effectiveness of PPAP on economic growth in China’s poor counties, and provides key policy implications for the improvement of Chinese poverty alleviation policies in future.