Abstract: Establishing a reasonable and effective power market trading mechanism, which encourages power users to take part in demand response and promote the local consumption of distributed renewable energy, is a significant way to achieve multi-party win-win, economic, and environmental protection in the operation of the distribution network. Based on the distributed storage and smart contract technology of blockchain, an electric energy trading transaction mechanism in the distribution network is proposed. To promote the local consumption of photovoltaics, a photovoltaic internal electricity price model is designed to guide flexible loads in response to market demand for electricity. And the credit value model is introduced to punish breaches of contracts during the trading process, supervising photovoltaics users to keep their promises and protect the rights and interests of power users. Moreover, a smart contract model is established to maximize the benefits of photovoltaic users and minimize the cost of purchasing electricity for flexible loads. Both parties of buyers and sellers negotiate electricity prices and formulate reasonable demand response strategies to reach a consensus on the transaction. Finally, the proposed model is verified and analyzed, and the results show that the trading mechanism can effectively balance the interests of the trading subject and promote the local consumption and utilization of photovoltaic. Meantime, it also can reduce power fluctuations in the distribution network, which is conducive to the safe and flexible operation of the system.