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No question about it – Americans love sales, discounts, and rebates.  Will rebates for energy-efficient-appliances encouraging the replacement of old appliances be sizeable enough to stimulate sales?  Based on results from states whose programs already started, the answer is an overwhelming “yes.”  Take Minnesota and Iowa, for example; eager consumers reserved their rebates and exhausted their funds in 5 days.  Phone lines were jammed and the money was soon committed.

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.