New Program To Offer Rebates For ‘Clunker’ Appliances

Now that the “Cash for Clunkers” program is helping get something shiny and new in many garages, what’s next? The answer is still close to home.

In late fall a similar program for household appliances is set to begin. The intent is to boost sales of washing machines, dishwashers, refrigerators and other large home essentials.

Those sales took a huge hit when the new housing construction slump spread across the nation. Manufacturers and dealers hope the program entices people to return to their showrooms.

When Congress approved the federal economic stimulus package earlier this year it earmarked $300 million for the new program. Expectations are that rebates will be as high as $200 for some items purchased by shoppers. Included will be high-efficiency home appliances, air-conditioning systems and furnaces.

Long before the housing crisis occurred another rebate program approved by Congress targeted the appliance industry. The energy bill of 2005 approved the use of $300 million in rebates during a six-year period. Those funds never were authorized.

All appliance purchased in the new program must have Energy Star ratings, indicating they meet the energy-efficiency guidelines established by the Department of Energy and the Environmental Protection Agency. The Association of Home Appliance Manufacturers reported that just over half of major appliances made in 2008 were shipped with the designation.

To qualify for rebates, buyers won’t have to trade in older, less-efficient models, which is a key component of the car program. Appliances made by companies based overseas will be eligible for the rebates if they have the Energy Star label.

“Replacing older appliances with Energy Star appliances is the most practical and effective step a homeowner can take to save energy and money on utility bills,” said Joseph McGuire, president of the association.

Although federal money will be involved, it is up to state governments to determine the details of their respective programs, including the rebate value for each kind of appliance. The Department of Energy has set an Oct. 15 deadline for the states to submit their plans.

As appliance companies have struggled to overcome the toll of sales declines linked to home construction as well as the recession, so have retailers. Sears reported Thursday their shoppers in the second quarter bought fewer refrigerators, washers and dryers, which helped push sales down 13 percent. In a bid to help appliance sales, the company has been offering a free purchase-protection plan on home appliance to help customers make their payments if they lose their jobs.