Energy Costs & Savings
Cash for Clunker Appliances
The fridge on its last legs? Uncle Sam wants you to replace it with a new, energy efficient model -- and will give you money to do so.
By Jim Ostroff, Associate Editor, The Kiplinger Letter
April 5, 2010
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Cash rebates for clunker vehicles were such a smash hit, the government is at it again -- this time offering you cash for your worn-out household appliances.
The $300-million federal program -- administered through the states -- will provide consumers with a cash rebate of up to 15% of the cost of each new Energy Star-rated refrigerator, freezer, dishwasher, clothes washer, water heater and room air conditioner. Expect rebates to run from $100 to $250, depending on the cost of the appliance.
But wait -- there’s more. The program also covers central AC/heating systems, providing rebates of up to $1,500 for Energy Star-rated replacement systems plus a federal income tax credit of up to $1,500 on purchases made by the end of this year.
Though a few states -- Iowa, Kansas, Minnesota and Rhode Island -- have jumped the gun and already have the incentives in play, most other states will launch the program later this month. States’ shares of the federal program are based on population. California will receive the top amount: $35.3 million; Wyoming, the smallest: $511,000.
Based on early results in the four front-runner states, the appliance program will be as wildly popular with consumers as the cash-for-clunker car program was.
Appliance manufacturers and retailers are excited, eager for the sales boost the program will provide. The rebates should push sales of appliances to $22 billion this year -- up 10% over last year, when sales bottomed at around $20 billion -- though that’s still down 15% from the record hit during the housing boom in 2005.
General Electric, Westinghouse, Whirlpool, Maytag, Trane, Carrier, Viking and other manufacturers, as well as national chain and independent retailers, hope that many consumers in need of one appliance will decide to spring for another as well, since the government is paying part of the tab. Many retailers are also planning discount tie-in promotions, offering big savings on related merchandise -- such as outdoor gas grills and riding lawn mowers -- that’s not eligible for the federal rebates.
Is there a catch? Only a small one, but it shouldn’t cause anyone any grief. Uncle Sam wants proof that an old appliance is being recycled before paying the rebate on the replacement. But reputable installers will be happy to haul your old appliance away for recycling at little or no charge after they set up your new one.
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Reader Comments (10)
Posted by: Bob at 04/05/2010 02:14:35 PM
Watch out for the energy star premium price. Make sure the appliance is actually on the approved list and make sure it qualifies as a deduction. Also, calculate the pay back. If the appliance premium price is higher than the rebate and it isn't that much more efficient, it may not be a good deal.
Posted by: Stefan Lasiewski at 04/05/2010 04:36:25 PM
>>>California will receive the top amount: $35.3 million; Wyoming, the smallest: $511,000.
Posted by: maureen at 04/05/2010 10:30:42 PM
No rebates for oven or cooking ranges? The one appliance we need... That is disappointing. Does anyone know if ovens are included in this 'cash for clunkers' program?
Posted by: Just Me at 04/06/2010 12:30:22 PM
Great idea.... but with the economy the way it is.... where do i get the money to buy the new appliance?
Posted by: Peter Stasko at 04/06/2010 02:52:21 PM
WHY ARE DRYERS LEFT OUT OF THE LOOP? WE NEED ONE BUT NO REBATE? WHY?
Posted by: joyce Zinn at 04/07/2010 07:05:23 AM
this program is great for people who can afford it.part of our business is used appliances.we are having a hard time finding them for people who can't afford to buy new ones. We have had people going without a refrigerator,cooking stove,because they can't find a used one.going to a laundry matt to do your laundry is very expensive. This is very hard when you have a family . What are these people suppose to do?
Posted by: Kris at 04/07/2010 03:11:09 PM
Thats fine for people that can aford to replace them, howevery people like me that are stuck on SSD do to complation from cancer .I need so meney things for my home and have to drive a 24 yr. old car because the 2 yr old ford car I payed $10.000.00 for and only lasted 6 yrs.( precancer) befor the mortor sezzed one of three mortors they put in that year car .To the best of my knolage the only one that failed. When I say Ihave alot of things for my house I mean things like a more efisent heating system,, washer, dryer ,windows and so on I don't have the money to pay taxes on my house ,the only thing I have left . Now someone tell me how do I do something like that on a income of $616.00 a month so thats what I think about it P.S. a toyota car that still runs and yes ti needs some work on it so i drive it very little thats what worng with car comp.
Posted by: Tom at 04/07/2010 07:51:03 PM
Dryers aren't energy star rated. From the Energy Star website: "ENERGY STAR does not label clothes dryers because most dryers use similar amounts of energy, which means there is little difference in the energy use between models. The Department of Energy's Appliance Standards program conducted a detailed study which found that the clothes dryers on the U.S. market do not vary significantly from each other in terms of energy consumption. This is also the reason why the Federal Trade Commission (FTC) does not require clothes dryers to have a yellow EnergyGuide label. Over the next few years, DOE Appliance Standards program will be revisiting this study as it determines whether to revise the current federal energy conservation standards for dryers. We will keep a close eye on this process to see if changes in technology and market conditions have made an ENERGY STAR clothes dryers program more feasible."
Posted by: greenwired at 04/08/2010 09:48:00 AM
For what period of time will this rebate be effective?
Posted by: Jim Ostroff at 04/13/2010 09:05:56 PM
Jim Ostroff here, at Kiplinger. Some products, such as dryers, do not quality for this federal program because they aren't Energy Star rated. Most of the states' "cash for appliances" programs will begin in April and continue through 2011, or until the money runs out. To find out when your state's program begins it's best to check on its "energy office" website. Kiplinger never takes sides on issues. Understand, the premise for this rebate program, like last year's for autos, was that manufacturers needed help. Improving appliance's and autos' energy efficiency mattered, but it was a secondary goal.