Appliance Rebates: Save Now and Later

by Dianne Molvig

Household appliances are the workhorses that wash our clothes, heat our water, store our perishable food, keep our homes comfortable in any kind of weather, and much more. Performing these tasks consumes more than 70% of the energy we use in our homes, according to the U.S. Department of Energy (DOE).

If you've been thinking about replacing your appliances with newer, more energy-efficient models, now may be the time to buy.

Save money, boost the economy

The DOE's appliance rebate program pays cash back for the purchase of new Energy Star appliances to replace old models. With rebates ranging from $25 to $250, you'll save money when you buy. Plus, you'll continue to save on your gas, electricity, and water bills over each appliance's lifetime.

For example, replacing a washing machine manufactured before 2000 with a new Energy Star model can save up to $135 a year, according to the DOE.

Funding for the $300 million rebate program comes from the American Recovery and Reinvestment Act of 2009. All 50 states, the District of Columbia, and five U.S. territories received a share, apportioned by population size. Each government entity designs and runs its own program.

Delaware was one of the first states to roll out its program, starting in December 2009. "The rebate program has been a great way to raise awareness about saving energy and money and cutting down on carbon emissions, as individuals and as a state," says Becky Fleischauer, spokesperson for the Energize Delaware initiative of the Sustainable Energy Utility.

Wisconsin was another state out of the gate early, in January 2010. "We've had high consumer interest in this from day one," says Linda Mae Schmitt, Energy Star field manager for Wisconsin's Focus on Energy. "Also, retailers are reporting good sales. The program has been highly positive."

Appliance sales were down 10% in 2008 and another 12% in 2009, according to the Association of Home Appliance Manufacturers (AHAM), Washington, D.C. It's still too early to gauge the rebate program's economic impact, but "we're certainly encouraged by what we're seeing so far," says Jill Notini, AHAM's vice president of communications and marketing. "The program is encouraging people to get back in the retail sector and upgrade to more efficient appliances."

A few FAQs

• How long does the program last? The program runs until February 2012, or until the states and territories run out of rebate money. As of early March 2010, Minnesota, Iowa, and Kansas already had expended their allotments.

• When does the program begin? Some states rolled out their programs in late 2009 or early 2010. Most have launch dates set in March or April 2010.

• Which appliances are covered? Rebates are for new Energy Star-rated appliances only. Eligible appliance types vary by state or territory. Indiana, for instance, decided to limit its rebates to home heating and cooling equipment. The DOE recommends that programs consider granting rebates on boilers, central air conditioners, room air conditioners, clothes washers, dishwashers, freezers, oil and gas furnaces, heat pumps (air source and geothermal), refrigerators, and water heaters.

• How big a rebate can I expect? The states and territories set the rebate amounts for different appliance categories. Rebates vary by type of product, purchase price, and other market factors.
  The program runs until February 2012, or until the states and territories run out of rebate money.

• Must I recycle old appliances? Some states require proof of recycling to get the rebate. Others pay an extra premium for recycling. Usually recycling is easy; many retailers haul away and recycle old appliances when they deliver new ones.

• Who is eligible for rebates? The program is for consumers. The individual programs set eligibility. Oregon, for instance, has designated its rebates for low-income people only.

• Can I qualify for other incentives at the same time? Some manufacturers, states, and utility companies offer rebates of their own. If you meet eligibility requirements you can take those rebates, as well. Some products also may be eligible for federal tax credits. For a list of additional incentives and rebates see the Database of State Incentives for Renewables & Efficiency.

Learn more

Published April 1, 2010

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