Cash For Appliances Program – Upgrade Your Clunker of a Fridge, Washing Machine, Dishwasher

Fresh off the huge success of the Cash for Clunker old car trade-in program, the government is now planning a similar rebate plan for your old appliances.  Simply put – there will be cash rebates ($50 to $200) available which can be applied if you buy new appliances with an Energy Star seal.  The main difference with this program is that unlike the Cash for Clunker program you don’t have to trade in your old appliance to get the rebate.  So if you want to move your grandfather’s old 1950’s fridge out to the garage then this program won’t interfere with those plans.

The program is part of Obamas economic stimulus package for 2009 which provided money for various parts of the economy and is now going to stimulate the appliance industry.  $300 million dollars has been allocated so far.  Considering how quickly the original Cash for Clunkers funding was increased from $1 billion dollars to $3 billion dollars after it’s quick success, I don’t think it’s much of a stretch to imagine that the Cash for Appliances program could get increased funding if demand is high enough.

[edit Sept 27 – Cash for Appliances – List of Eligible Appliances]

[edit Dec 9 – Cash for Remodeling]

When does the Cash for Appliances program start?

The program is very much still in the planning stages.  It will be run by each individual state so make sure whatever information you get is applicable to your state or the state where you are going to buy the appliances in.  The government’s Energy department has set a deadline of Oct. 15 for states to file formal applications.   These formal applications will outline the exact details of how much the rebates are, who will be eligible and how the plans will be administered.  The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November.  This is just a guess – it’s very possible that it could get used up much quicker or much slower than anticipated.  I would assume that the programs will start either on October 15 or by November 1 by the latest.

The amount budgeted for this program should cover approximately 2 million appliances.  This may sound like a lot but if you consider that the Cash for Clunker program applied to 750,000 cars and was done in 2 weeks, it’s very possible that the cash for appliances funding could easily be used up in a week.  Since the original amount ($300 million) is relatively small ( it’s less than a third of the original amount allocated to the Cash for Clunkers program ) so the Cash for Appliances program could get extended several times if necessary.

What kind of appliances are eligible for the Cash for Appliances rebates?

The Cash for Appliances rebates will be awarded for the purchase of appliances which have the Energy Star seal.

Here is a list of the eligible appliances:

  • Refrigerators
  • Air conditioners
  • Washing machines
  • Freezers
  • Central and window air conditioners
  • Dishwashers
  • Furnaces
  • Water heaters
  • Heat pumps

How much will the Cash for Appliances rebates be?

This information has not been determined yet.  So far the plan is that the rebates will be at least $50 and not more than $200 per appliance.  I would assume that the larger rebates will be given for appliances that are more efficient.  For example all the refrigerators that have an Energy Star seal will have different efficiencies – it’s likely that the fridges that are more efficient within that group will get the largest rebates.

Energy savings by the consumer is also a great reason to use this program.  If you can save $100 per year on a new fridge then that’s a good deal even without the rebates.

Old refrigerators and freezers are some of the biggest energy users in homes, and getting old ones out for energy-efficient models will save customers anywhere from $50 to $150 a year on electricity bills, says Steven Rosenstock, manager for energy solutions at the Edison Electric Institute, which represents 70% of the investor-owned utilities in the United States.

Will existing state rebates still apply?

Yes, any existing rebates for energy-efficient appliances will still apply so you can “piggy back” the different rebates to get a fairly cheap appliance.  It’s important to do your research on this topic since there are different existing rebates in various states and the Cash for Appliance program will unfortunately have different rules and rebates for each state.

Why is the government doing this?

The government is funding the program in the hope that the appliance industry will get some stimulus money.  The home appliance industry has been in a big slump with sales in 2009 down about 15% from last year.

“These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy,” Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and Environmental Protection Agency.

What should I with my old refrigerator (or other appliance)?

If your old appliance is an old clunker that can’t be sold then try to find out if your local utility will pick it up for free.  Some utilities will not only pick up the old appliance but will also pay you some money for it.

Meanwhile, utilities in many states offer to pick up and recycle old refrigerators and freezers and give the customer a rebate ranging from $25 to $50. Such programs began on the West Coast in the last decade but more recently have been moving east.

In five years, NV Energy in Nevada has picked up 50,000 refrigerators, giving $30 to customers in Nevada and California who have turned in their working, but old appliances. The company hopes to boost the program to 20,000 appliances a year and help the utility reach its goal of producing a state-ordered 25% of its electricity through renewable or energy-efficiency sources by 2025, Hargrove says.

In Michigan, where 2008 energy legislation required utilities to cut electricity production by 5% a year, the program is exceeding expectations.

DTE Energy, parent company of Detroit Edison which serves 2.2 million electric customers in Detroit and its suburbs, collected more than 3,300 appliances since starting the recycling program at the end of June. It offers $50 per refrigerator or freezer and $20 for old window air-conditioner units.

More information on the Cash for Appliances program

Cash for Clunker Appliances coming soon

Cash for Appliances – Government will give money for old appliances