A “Cash for Appliances” stimulus package is getting ready to follow the “Cash for Clunkers” program which generated new car sales totaling nearly 700,000 units and came in at a cost of $2.877 Billion which was under the $3 Billion appropriated by Congress to run the program.
The $300 Million “Cash for Appliances” Program is currently being planned for this fall and is funded under the American Recovery and Reinvestment Act for state-run rebate programs, for consumer purchases of new ENERGY STAR® qualified home appliances. The “Cash for Appliances” program will offer rebates of $50 – $200 on the purchase of “High Efficiency” or, “Energy Star” seal household appliances.
U.S. Department of Energy Secretary Steven Chu said, “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.” He also stated, “Appliances consume a huge amount of our electricity, so there’s enormous potential to both save energy and save families money every month,” and stated, “These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy and create jobs.”
The Department of Energy has set a deadline of Oct. 15, 2009 for states to file formal applications. The “Cash for Appliances” program details will vary by state and the Department of Energy expects the bulk of the $300 million to be awarded by the end of November. The Department of Energy news release stated, “States have the flexibility to select which residential ENERGY STAR® qualified appliances to include in their programs and the individual rebate amount for each appliance. DOE recommends that states and territories focus their program efforts on heating and cooling equipment, appliances, and water heaters as these products offer the greatest energy savings potential. ENERGY STAR® qualified appliance categories eligible for rebates include: central air conditioners, heat pumps (air source and geothermal), boilers, furnaces (oil and gas), room air conditioners, clothes washers, dishwashers, freezers, refrigerators, and water heaters.”
The “Cash for Appliances”, appliance stimulus package is providing hope to the beleaguered appliance industry and although it will probably not be enough to lift them out of the worst downward slide in the industries history, it will provide some relief. Whirlpool Corporation the worlds largest appliance manufacturing company with annual sales of approximately $19 Billion and 70,000 employees at 68 locations around the world, has reported a sales drop of about 20% in the first 2 quarters of this year, with the rest of the industry having had similar results. Wall Street has reacted favorably to the news of the “Cash for Appliances” program with Whirlpool stock shares increasing 6% when the program first was announced, and another 5% the following day of trading. The reaction was heavy as it is based on a best case scenario of $240 million in sales coming to Whirlpool as a result of “Cash for Appliances” program.
In the “Cash for Appliances” program, purchasers do not need to turn in their old appliances and only need to purchase an appliance with the “Energy Star” seal certifying the appliance as a “High Efficiency” appliance. Currently about 55% of the appliances manufactured meet the “Energy Star” requirements. The Energy Star” requirements are standards set by the Environmental Protection Agency & the Department of Energy and determine which appliances are eligible for rebates under the “Cash for Appliances” program. The “Cash for Appliances” rebates will piggyback on top of other rebate programs that have existed for years in over half the states, and tax credits for the purchase of energy efficient appliances. Many of the appliance manufacturers and retailers are planning aggressive marketing programs and will probably offer additional discounts to enhance their sales under the “Cash for Appliances” program. Home Depot & Lowes have already been offering deep price cuts on big ticket items like appliances lately with little effect. The appliance manufacturing and sales industry is hoping that the “Cash for Appliances” program will provide the trip wire to spur sales but note that the program does not quite have the same appeal as the $4500 rebate for trading in a clunker under the “Cash for Clunkers” program. At this point any relief is welcome to both the appliance industry and the consumer, as many of the consumers have been struggling with high energy costs as well as repair bills on older appliances which have been being repaired rather than replaced.
Consumers should be getting ready to take advantage of the “Cash for Appliances” program by budgeting, and gathering information on appliances which they may want to replace. The “Cash for Appliances” program is one where you want to be ready to act so that you can take full advantage of the program when it becomes available. You should prepare get the maximum benefits from the program and the deep discounts that are expected to accompany the program as well as the advantages of saving energy and improved reliability. The energy savings of the “Energy Star” appliances can offer a huge savings on your utility bills and details of the savings possibilities are listed on the energy star website. Older refrigerators from the 70’s could cut over $200 from your utility bill each year and refrigerators from the 80’s could cut over $100 if replaced with an “Energy Star” appliance under the “Cash for Appliances” program. Clothes washers built before 1998 if replaced could save you over $135 a year in addition to saving 17 gallons of water per load. Replacing a dishwasher that was built before 1994 could yield a savings of about $30 per year in energy costs. Take everything into consideration even things such as HVAC units and water heaters. Research and be ready by knowing which brands and models have the features that you desire in an appliance.
The time is now to prepare for the “Cash for Appliances” program, get your priorities for which appliances will give you the maximum energy savings, as well as which appliances you currently own that will have higher repair costs due to age and condition and the details of the program in your state. Don’t miss out on your chances to save big under the “Cash for Appliances” Economic Stimulus Package.
