Fresh off the rousing success of the "Cash for Clunkers" automobile program the Obama Administration has announced it will roll out a similar "Cash for Refrigerators" incentive program - formally named the "Energy Efficiency Appliance Consumer Rebate Program" - this Fall. Through the program, consumers will be able to take advantage of $50-200 rebates to purchase high-efficiency household appliances that feature the Energy Star seal. Energy Star certified appliances use less energy, save consumers money, and help protect the environment.
There are more than 60 categories of products that carry the Energy Star rating.
While the focus of the program's name is on refrigerators – because they use the most energy of any household appliances by virtue of running 24 hours a day - other appliances will qualify for rebates including refrigerators, freezers, clothes washers, dishwashers, water heaters, oil and gas furnaces, central and room air conditioning units, heat pumps, and boilers. Each state has the authority to decide which appliances it will allow to qualify for rebate.
Catching a Star
The Administration is putting $300 million into the program as part of its American Recovery and Reinvestment Act (ARRA) of 2009. The program will be administered through state energy offices which will receive money from the federal government to provide immediate rebates to new appliance buyers. Twenty-five states already operate their own incentive programs to lower the cost of Energy Star certified appliances. The new federal funds will boost the money available to buyers in those states; remaining states will use the money to create a first-time program. (More and more companies are "going green", but that term, in itself, can be subjective. Find out more in Forget Green Stocks, "Green" Will Do.)
Flaw in the Plan
One big difference between the Cash for Refrigerators program and its automotive counterpart is that consumers won't need to trade in their old appliances to qualify for the rebate. That has some critics calling foul, citing concerns that buyers will simply add another machine to their home instead of replacing one and lowering their overall energy consumption.
The Administration is hoping, however, that the program will help consumers move toward greater energy-efficiency and boost consumer spending to aid the economic recovery. Major appliance companies, including Whirlpool, Electrolux and GE, have suffered as a result of the collapse of the housing market - fewer home buyers means fewer people buying appliances for their homes.
The Energy Star website features a "Refrigerator Retirement Savings Calculator" that can show you the potential energy bill savings you could realize by making the upgrade.
Making the Old Act Like New
If you're not in the market for a new appliance, you can still make relatively small changes for potentially big savings on utility costs. Simple changes to your routine, like changing your heating and cooling air filter monthly, covering all 2X4 boards in your attic with insulation and altering the "power management" settings on your computer could save you plenty in the short-term. (Follow a few of the simple tips in Go Green, Save Money to become more "green".)
As more appliances are going the "green" route, it won't be a surprise if the Cash for Refrigerators program is a huge success - and it could lead to good things to come for retailers, consumers and the environment.