DEFINITION of 'Cash for Refrigerators'

Cash for refrigerators was a federal energy efficiency program introduced in the fall of 2009. The program offered U.S. customers a rebate of up to $200 when buying a new, energy-efficient home appliance.

BREAKING DOWN 'Cash for Refrigerators'

The cash for refrigerators program was introduced on the heels of the controversial cash for clunkers subsidy which saw over 690,000 new vehicles purchased over the course of the program, totaling over $2.9 billion. The United States Congress set aside $300 million for the appliance energy efficiency program. It was part of the American Recovery and Reinvestment Act of 2009.

Cash for Refrigerators Introduced to Help Economy and Environment

In 2009, many people had been financially hurt, if not devastated, by the Great Recession, and sales of new appliances, among other things, were down as much as 15-20%. Cash for refrigerators offered $50 to $200 rebates to homeowners buying new energy-saving appliances, including:

  • central air conditioners
  • heat pumps (air source and geothermal)
  • boilers
  • furnaces (oil and gas)
  • room air conditioners
  • clothes washers
  • dishwashers
  • freezers
  • refrigerators
  • water heaters

There was no trade-in required to receive the rebate, just proof of purchase. The effect of the program was to be two-fold—it would stimulate the stagnant economy by encouraging people to spend money on appliances, thereby increasing the need for appliances and creating jobs, and it would help protect the environment by promoting energy-efficient appliances over standard ones, reducing energy use and greenhouse gas emissions.

While almost half of the states at the time already had a rebate program in place, this program provided $300 million in federal funds that the states could decide how to disperse. Residents of states already offering rebates would receive the federal rebate in addition to the one from the state, potentially doubling the amount. The federal program is no longer running, but certain states and manufacturers are still offering rebates on energy efficient appliances.

Cash for Clunkers

This program, after which cash for refrigerators was nicknamed, was officially called the Car Allowance Rebate System (CARS). It started July 1, 2009 and ended not quite two months later because the funds had already been exhausted. In that length of time, $3 billion were given to U.S. residents who traded in their current vehicle for a more fuel-efficient model. Trade-in vehicles had to be no more than 25 years old and average 18 miles or less to the gallon to qualify. Vouchers received by the car buyers ranged between $3,500 and $4,500.

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