The theory is that old appliances not only cost consumers more to operate but also increase greenhouse gas emissions. When an appliance identified with an Energy Star label replaces an older model, both the environment and the consumer benefit. The new appliances are often more expensive than non-Energy Star models, so the rebate is an attempt to offset the great initial cost.

Source: Typical House Memo, Lawrence Berkeley National Laboratory, 2009 and Typical house_2009_Reference.xls spreadsheet. Average price of electricity is 11.3 cents per kilo-watt hour. Average price of natural gas is $13.29 per million Btu. * "Other" represents an array of household products, including telephone, ceiling fans, stoves, ovens, microwaves, and small appliances like coffee makers and dehumidifiers.

As noted in the chart, 13% of a typical family’s energy spending goes toward appliances such as refrigerators, washers, dryers, and dishwashers. This does not include the power consumed by electronics like televisions or even that used by stoves, telephones, and other household appliances. The appliance rebate program targets appliances measured by power use in this category, although some states are rebating water heaters or heat pumps.

What is included in the Cash for Appliances program varies by state. The rebates are claimed by mail, but each state has its own requirements to qualify and receive the funds. Unlike the Cash for Clunkers program, recipients of the appliance rebates do not have to turn their old appliances in, but are expected to retire and recycle the old ones – not keep them as second refrigerators or give them to a neighbor.

Here is the lineup of rebate programs for the greater DC area:

DC:

What’s included: Refrigerators, clothes washers, dishwashers, electric heat pumps, water heaters.

How the program works:  Advanced rebate reservation is required; amount of rebate varies according to how efficient the appliance is.

Program Dates: April 2010 till funds are exhausted.

Old appliances: Participant must provide proof that the old appliance was hauled away.

Contact:  District Department of the Environment, Energy Office

Total Funding for district: $568,000

Virginia:

What’s included: Refrigerators, clothes washers, gas storage water heaters, gas tank-less water heaters, gas furnaces, air source heat pumps. (Final details subject to change.)

How the program works:  Advanced rebate reservation is required.

Program dates: April 2010 till 2011 or until funds exhausted

Old appliances: State encourages recycling.

Contact:  Virginia Department of Mines, Minerals, and Energy

Total Funding for state: $7,454,000

Maryland:

What’s included: Refrigerators, clothes washers, electric heat pumps, water heaters.

How the program works:  Rebates offered though local utilities for most; others apply by mail.

Program dates: April 2010 till funds exhausted.

Old appliances: State encourages recycling.

Contact:  Maryland Energy Administration

Total Funding for state: $5,405,000

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Cash for Appliances, the appliance replacement program, funded by the Stimulus bill, is set to begin in April in the tri-state area, and in March or April around the country.  Each state designed its own program, based on the amount of stimulus money allocated and the particular energy needs of its economy, and received Department of Energy approval.

The Pros

New Energy Star appliances save money on energy costs.  New central air conditioning units made after 1998 save 30% off a typical $1,000 yearly bill.  Washers made after 2000 save $135 per year.  Dishwashers made after 1994 save $40.  Refrigerators made since 1993 could have a $100 energy bill.  When all savings are combined the consumer with a house full of Energy Star-compliant products could save $500 or more annually on energy bills.  Figures for all appliances are compiled at www.energystar.gov.  There are more pros than we can count. However, are these energy savings enough to make people buy new products?

The Cons

Energy star appliances that qualify are more expensive than their counterparts.  Virtually all newer appliances use less energy than in the past, but the Energy Star models are predicted to save even more per year.  Appliance maker, Whirlpool, notes on its website that the suggested prices for its line of Energy Star refrigerators is $649 (15 cubic foot) vs. $2,999 (22 cubic foot) vs. $529 (14 cubic foot) to $1,009 (22 cubic foot).  The features in the various models differ but cash strapped consumers may be more concerned with immediate out-of-pocket costs than long term energy savings.

In most states, the program covers washers but not dryers.  (Most dryers use about the same amount of energy.)  Consumers who want matching appliances will pay more for both parts of the pair but will only be rebated on half their purchase.  Will this tempt consumers to select a cheaper pair?

The state-designed programs will only apply on purchases made once the program is in effect.  To keep the program within budget, consumers in most states must notify the state what appliance(s) they intend to buy and then take their “rebate confirmation number” to the dealer within a specified time in order to claim the mail in rebate.

For consumers who need to replace an appliance before the state program kicks in, appliance manufacturers are offering their own rebates and special pricing deals.  Some lucky consumers can claim the state rebate, cash in the manufacturer’s deals, and even claim a federal credit where applicable.  In DC and Maryland, area retailer Pepco offered rebates as early as last fall, and other stores are likely to follow suit.

Critics of the rebate programs make similar observations as those negative about the Cash for Clunkers program or even of the housing credits.  Some people would have bought anyway…  After the rush of buying to claim the rebate, sales will fall off…  The energy savings are not significantly greater than the cost of the program…  Consumers pay for the program through local utility company surcharges…

Critics will always have something to say. We just have to take it with a pinch of salt. However, by all indications, the Cash for Appliances programs shows promise of being popular, just like the Cash for Clunkers program before it.  Even if some people miss the rebate, the hope is that they will take advantage of other deals once they’ve whet their appetite to buy.

Looking for a home to put those new appliances in?  Express Realty Services can help you find an affordable home in the DC area, including Virginia, or Maryland.  Express Realty Services has a great selection of homes to fit your budget.  We can even show you our latest remodeled and renovated homes from our sister company, Express Homebuyers!  Call today or visit the Express Realty Services website.