Why investing in energy efficiency pays off. Reposted from the Financial Post with permission by the author, Jim Harris
There’s a widely held misconception that going green is expensive. This regular column will smash that myth to pieces.
McKinsey & Company’s report, The Case for Investing in Energy Efficiency, shows that US$170-billion can be invested in energy efficiency projects globally for 13 years with an average internal rate of return (IRR) of 17%, which will generate US$900-billion of annual savings by 2020.
Just how good an investment is energy efficiency? To benchmark it, the long-term average return for investing in the stock market is 10% and for real estate, 16%. So energy efficiency gives a better rate of return than the two things we’ve always been told generate long-term, proven returns.
There are four things that are important to note about this study:
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