For those on either side of the political debate on climate change, the economics of reducing emissions is beginning to make good financial sense. Market realities, high fuel costs, and decreasing costs of alternative fuel vehicles, are all contributing to an environment where by conversion to alternative fuel vehicles (AFV) is becoming increasingly attractive. Add to the mix U.S. tax credits up to $7,500 per vehicle, and the numbers start to add up.

SunRidge Farms, a snack food maker in Royal Oaks California recently told Jennifer Wang of Entrepenuer.com, “We save 33 percent on fuel costs off the hybrids alone.” SunRidge began conversion to an alternative fuel fleet in 2004, as part of an overall sustainability strategy. Conversion to AFV typically reduces fuel consumption, which immediately reduces fuel costs. In addition to this, switching to alternative fuels such as electric or compressed natural gas (CNG) also reduces carbon emissions.

While the conversion to alternative-fuel vehicles may not suit every scenario, the increase in AFV sales is undeniable. U.S. sales in August nearly doubled, as automakers across the board are developing AFV technologies to compete with the ubiquitous Toyota Prius.

Chart Credit: Clean Cities Alternative Fuel Price Reports