Latest Clunkers Program Provides Path to a Greener Fridge, Appliance Sales Boost

Can federal stimulus dollars deliver a one-two punch of ratcheting up energy efficiency in U.S. households and provide an economic shot-in-the-arm to country’s appliance industry? It seemed to work for the auto industry. So why not apply the basic concept of cash for clunkers to your old fridge and dishwasher?

The American Recovery and Reinvestment Act provided $300 million in funding for state-run rebate programs that will give consumers up to $200 who buy energy efficient appliances that carry the Energy Star label.

The appliance rebate program is technically not new. It was included in the Energy Policy Act of 2005, but was never funded. It wasn’t until the recovery act that money was appropriated for the program.

The deadline for states to apply for the funds was Aug. 15. Department of Energyspokeswoman Chris Kielich said today all 56 states and U.S. territories have applied for the appliance rebate program funds.

The effort couldn’t come at a better time for appliance makers like Whirlpool, which saw its second-quarter sales in North America fall 17 percent to $2.4 billion. Just take a stroll over to your local appliances store … aside from the crickets, there’s not much going on.

The goal of the program — per DOE — is to save energy and stimulate the economy by encouraging regular folks to replace their old appliances with new Energy Star qualified models. Each state will develop their own plans for the program — due Oct. 15 — including which products will qualify and the amount of the rebates.

DOE will award about 10 percent of a state’s allocated funds by Sept. 30, aimed covering costs to develop the program. The remaining funds will be awarded after the DOE approves a state’s application and program plan. This means states and, in turn, the appliance industry probably won’t see any money until late fall or the end of the year.

Most of the appliances will likely be recycled. About 90 percent of appliances in 2008 were recycled for their valuable metal, according to the Steel Recycling Institute. However, charities and non-profits looking for end-of-the-year donations may also benefit from the rebate program because unlike cash for clunkers, the appliances do not have to be destroyed.

Image from Flickr user Nick Farr, CC 2.0