Federal Rebate Program Targets Home Appliances

By PlanetLaundry staff | Sep 14, 2009

Beginning late this fall, a $296 million federal program will authorize rebates of roughly $50 to $200 for purchases of high-efficiency appliances that bear the Energy Star seal. The money is part of the broader economic stimulus bill passed earlier this year.

Program details – such as which appliances are covered, the exact size of the rebates, and how they get processed – will vary according to each state's proposals, and the Energy Department has set a deadline of Oct. 15 for states to file formal applications to participate, according to BusinessWeek. Washington expects to award the bulk of the money by the end of November.

Unlike the popular $2.9 billion cash-for-clunkers car program, which ended on August 24, there's little evidence hard-hit consumers are clamoring to buy new washers and refrigerators; however, at least they won't have to trade in their old appliances. The federal outlay piggybacks on rebate programs for energy-saving appliances that have existed for years in more than 25 states, yet have largely failed to spur demand.

In fact, retailers such as Home Depot and Lowe's have offered deep discounts on big-ticket appliances lately, but with little impact. Shipments of washers, dryers, refrigerators and ovens dropped 10 percent in 2008 and were down 15 percent through July, according to the Association of Home Appliance Manufacturers.

"Whatever gets the consumer back in the marketplace is good for us," said J.B. Hoyt, director of government relations at Whirlpool, where shares are up 40 percent since the program was disclosed last month.

Over the next month, appliance makers will lobby state energy commissions to provide the highest possible rebates. "Twenty-five dollars does not get consumers' attention on a $500 purchase," Hoyt cautioned.

One challenge in assessing the potential impact of the incentive program is that consumers tend to purchase items such as washing machines when an existing appliance breaks down or during a home renovation. An extra $200 isn't likely to spur thoughts of a costly renovation in a shaky economy, and most people coping with a broken machine might likely feel forced to replace it in any case.