Cash for Appliances: Where Size Really Matters
Appliance rebate programs in Iowa and Minnesota started -- and ended -- in a 24-hour flurry of jammed phone lines and Web site crashes this week. So why is New York, which launched a similar rebate program last month, still sitting on more than $8.6 million? It's all in the size of the rebate.
Cash for appliances, as it's called, may not be as hefty as the cash for clunkers auto rebate program last year, but it will still boost sales and put money back into local economies. Which is why folks are paying close attention to the nationwide program.
The appliance rebate program gives residents money to trade in their old fridges and dishwashers for more energy-efficient models and is funded with $300 million in federal stimulus dollars. But unlike the cash for clunkers program, the feds gave states more control over how they issued the rebates. It was up to states, for example, to determine the amount of each rebate and which appliances would be eligible.
Minnesota and Iowa rebate programs show how influential $125 can be to the American consumer. Minnesota blew through the $5 million in federal stimulus dollars it received for the cash for appliances program within a day because it gave bigger rebates. Minnesota residents received $200 for buying washing machines, $150 for dishwashers and $100 for freezers that met the Department of Energy's Energy Star efficiency standards.
Meanwhile, New York's rebate program, which was awarded $18.7 million, still has millions of dollars available after nearly three weeks. New York residents receive only $75 for an Energy Star washing machine and $50 for freezers. The rebate amount increases by $25 for consumers who produce a receipt showing they recycled their old appliance.
The real economic test for appliance manufacturers will come in the second quarter, after most states have rolled out their rebate programs. Fourteen states, including Minnesota and Iowa, were scheduled to begin their appliance rebate programs in March. The program will begin in another 30 states and territories in April.
California and Texas -- both scheduled to launch their programs in April -- are two states to watch. California received $35.2 million in federal stimulus funds and is giving consumers $200 rebates for fridges and $100 for washing machines. Texas received $23.3 million and consumers are eligible to receive $240 in rebates for fridges, $180 for freezers, and more than $1,000 on certain air-source heat pumps.
Photo of refrigerator by Flickr user Lieschke, CC 2.0
