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Greater East Tennessee
Cash for Appliances is the New Cash for Clunkers
December 09, 2009

Cash for Appliances
is the New Cash for Clunkers

Following the success of the Cash for Clunkers program, the federal government recently announced the creation of a similar rebate program for consumers looking to purchase new energy-efficient appliances. While many of the details of the program are still yet to be determined, the Better Business Bureau offers the following guidance to consumers who might be interested in taking advantage of the program.

The federal government has set aside $300 million from the stimulus package to fund the new cash for appliances program. The intended benefit of the program is two fold. The first goal is to provide another way to stimulate the economy in an industry that has seen a 15 percent drop in sales, according to the Association of Home Appliance Manufacturers.

The second goal is to increase energy efficiency in households by replacing old appliances with newer “greener” ones. According to ENERGYSTAR.gov, the typical household spends more than $2,200 a year on energy bills but could save over one-third or about $700 per year by making the switch to ENERGY STAR products.

ENERGY STAR standards are set by the U.S. Department of Energy (DOE) and the Environmental Protection Agency and help consumers identify energy-efficient products in 60 different categories including appliances, windows and doors, heating and cooling equipment and water heaters. In 2008, about 55 percent of new major household appliances had the ENERGY STAR seal.

Following are a few details on the evolving cash for appliances program.

Program implementation will vary by state. The implementation of the program and distribution of rebates will occur at the state level. Every state must submit a plan that specifies which appliance categories will be included in its own program, the amount of rebates for each appliance and a plan for recycling old appliances.

DOE estimates that the $300 million set aside will be awarded to states for their programs by the end of November, and consumers should see the rebate programs implemented in late 2009 or early 2010.

Qualifying appliances will vary by State. States will decide which ENERGY STAR qualified appliances are eligible for a rebate. The DOE is encouraging states to focus on awarding rebates for heating and cooling equipment, appliances and water heaters.

No trade-in will be required. Unlike the Cash For Clunkers program, wherein participants had to hand over their old car and the clunker was sent to the scrap heap, participants in cash for appliances don’t have to exchange an older appliance for a new one.

Stay tuned for updates. Consumers should visit their own state energy department’s Web site for updates on program implementation in their area. More information from the federal government is available at http://www.energy.gov/recovery/

Take advantage of additional programs now. If you can’t wait to purchase a new appliance, you can still take advantage of other programs. Both the federal government and many state governments already provide tax credits for purchasing energy efficient appliances. Also, more than 25 states have recycling programs for appliances. The Database for State Incentives for Renewables & Efficiency (www.dsireusa.org) provides a state-by-state breakdown of local incentives and policies for renewable energy and energy efficiency.

For more BBB advice you can trust on how to be a savvy consumer, visit www.bbb.org