The past couple of months we’ve talked quite a bit about the Cash For Clunkers program, how it worked, and who could expect to receive a voucher towards the purchase of a new car. People were split down the middle as to whether the voucher program was even a good idea, with some saying it was just another example of wasteful government spending – while others said it was a great way to stimulate spending and boost our economy.
We may now have another cash for clunkers type program to debate. Earlier this year as a part of the American Recovery and Reinvestment Act a new program was announced that would allow people to receive rebates that would be good towards the purchase of a new ENERGY STAR® rated appliance to replace their less efficient models.
U.S. Department of Energy Secretary Steven Chu today announced the availability of nearly $300 million in funding from the American Recovery and Reinvestment Act for state-run rebate programs for consumer purchases of new ENERGY STAR® qualified home appliances. The new program underscores the Obama Administration’s commitment to make American homes more energy efficient, while helping to support the nation’s economic recovery.
“Appliances consume a huge amount of our electricity, so there’s enormous potential to both save energy and save families money every month,” said Secretary Chu. “These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy and create jobs.”
The new funding will be awarded to states and territories, through their energy offices, using a formula set forth in the Energy Policy Act of 2005. Each state or territory is required to submit a plan that specifies which ENERGY STAR® appliance categories will be included in their rebate program, the rebate level for each product type, how the rebates will be processed, and their plan for recycling old appliances. States and territories must first file an initial application expressing their intent to participate by August 15, 2009, followed by a full application by October 15, 2009. Approximately 10-25 percent of each award will be spent on administrative costs.
The goals of the program were to spur economic growth, create jobs, save energy and reduce greenhouse gas emissions. How successful it will be in those goals is anyone’s guess.
Depending on which state you’re in, there is a different amount of money available to use towards rebates, so it is probably best to move on it as fast as you can once the program starts. To find out how much money your state has to use towards appliance rebates, check this document.
How Do I Take Part In The Cash For Appliances Program?
The program will start some time late fall 2009, and program details will vary state by state. The states will have the ability to say which appliances are eligible, along with how much of a rebate consumers would get. The energy department has set a deadline of October 15th for states to file formal applications for the program. Details should become clearer for your state at that time.
Although the details will vary state to state, basically the program will authorize rebates to consumers of $50-$200 for purchases of more efficient household appliances. Unlike with the Cash For Clunkers program, people who take part in the program won’t have to trade in their old appliances. (thank goodness for that!) It is also expected that the rebates will be stackable along with other rebates currently available. So if your municipal district offers a $100 rebate towards a refrigerator, you would get that in addition to the federal rebate.
The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November.
What Appliances Are Eligible For The Rebate?
To qualify for the rebate the new appliance must be ENERGY STAR® rated. Qualified appliance categories eligible for rebates may include (depending upon your state):
- central air conditioners
- heat pumps (air source and geothermal)
- furnaces (oil and gas)
- room air conditioners
- clothes washers
- water heaters
Want to save even more? Use these coupons to save!
Let The Marketing Push For “Cash For Refrigerators” Begin!
Major appliance manufacturers have been feeling the pinch the past couple of years, with sales dropping and plants being shut down.
The leading appliance makers have felt the pinch. Whirlpool of Benton Harbor, Mich., which controls about 40% of the U.S. market, has seen its sales drop 20% through the first two quarters of this year. North American shipments for its Stockholm-based rival Electrolux, meanwhile, have dropped for a dozen consecutive quarters. Both companies have laid off hundreds of workers, and General Electric (GE) mulled shutting down an entire refrigerator plant earlier this year until deciding to keep it open with a reduced workforce.
Once the program begins I’m sure we can expect to see a huge marketing push, just as we saw with the Cash For Clunkers program. Anything the appliance manufacturers can do to help spur sales will be helpful for them. On the other hand, many are doubtful that the program will have much effect because the value proposition in receiving a smaller rebate for an appliance as opposed to a $4500 voucher for an old car just isn’t as motivational. Many people will probably be able to get by with their old appliance for a while longer. The manufacturers are hoping that’s not the case.
What do you think about the Cash For Appliances rebate program? Does it make you more likely to buy a new fridge, dishwasher or water heater? Tell us what you think in the comments!
Last Edited: 25th March 2010