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In this context, do renewable-energy projects make the cut as a smart capital investment? The short answer is: they never have in the past. For many years, utilities, retailers, manufacturers, and other companies with high energy demands avoided solar, wind, and biomass precisely because those technologies were too expensive, a money-losing proposition both in the short and the long term. When it comes to renewables, any return on investment is measured by money saved compared with what would have been spent on traditional forms of energy over a period of years. No savings, no return.
Over the past decade, however, costs for alternative energy have come down considerably. Now, solar, wind, and biomass can be cheaper than grid energy, when viewed over the long haul, especially when federal and state incentive payments are taken into account. Those savings and incentives can be calculated as an annual yield. Which means that companies can ask the question again: are renewables a good investment?
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