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$300 Million? When Will the Rebates Start?

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Our article about the government’s $300 million dollar rebate program which is part of Obama’s economic stimulus package hasn’t begun and consumers across the nation are wondering if it is ever going to happen.

Unlike the $3 billion clunkers rebate blitzkrieg that boosted new-vehicle sales last summer, this program has proceeded more slowly and is aimed at longer-term household investments. It’s also being run differently, with each state deciding what kind of equipment will qualify for rebates.

The federal Department of Energy said last summer that only residential appliances that carry the Energy Star designation would qualify for a rebate. It suggested that rebates could be applied to water heaters, refrigerators, central air conditioners and other big-ticket appliances.

After talking with several people familiar with the program, it now appears details will be released by the end of the year on exactly the types of equipment each state will include in its rebate program as well as the amount of the rebates.

If you can’t wait for your state to start its program, you might want to look into the possibility of getting a Federal tax credit by visiting the government’s energysavers.gov.

Cash For Clunkers – Appliance Clunkers

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Here’s some good news if you’ve got an old household appliance you’ve been wanting to replace. The government’s $300 million dollar incentive plan will help you pay for it. The plan is meant to help the appliance industry by giving a boost to slow appliance sales nationwide, but the relatively small amount of cash will not make a big impact on major appliance appliance dealers such as Whirlpool, GE, and Electrolux. There are also some potentially confusing details to be worked out:

The Wall Street Journal says unlike the clunkers plan, the program allows each state to pick qualifying models and tailor rebate amounts. Ohio might decide one washing machine qualifies for a $100 rebate, while California picks another for $125.

Manufacturers and retailers said they are reluctant to ramp up production or order new stocks until it is clear what models qualify. The Department of Energy, which designed the program, wants states to focus on just 10 categories of appliances carrying the federal Energy Star seal of approval for efficiency.

But other details are still uncertain. States could ask to include up to 46 other types of products, ranging from light bulbs to computers. While rebates are expected to range between $50 and $200, qualifying models and precise rebate amounts won’t be provided until late this year or early next.

Some of the nation’s biggest appliance makers are lobbying to make the plan rules uniform nationwide. They said the unknowns and the varying rules by state will make the program harder to explain to shoppers, in turn making it tougher to win sales.

The program “will provide consumers a unique opportunity to save money on energy-efficient appliances,” said Dave McCalpin, chief marketing officer for GE Appliances. He said Fairfield, Conn.-based GE is working with state governments to adopt rebate programs that rely on Energy Star ratings.

Some states are considering standards that exceed Energy Star requirements, a move GE opposes. “We believe it is very important that rebate programs are consistent across the country,” Mr. McCalpin said.

The stricter proposals underscore criticisms that the Energy Star program is not tough enough in raising energy efficiency. The Environmental Protection Agency is looking at revising the program’s standards. If it does so after the states set their rules, the rebates could end up subsidizing some appliances that are not as energy efficient as they could be.