Will Appliance Rebates Match Cash for Clunkers?

February 3, 2010

The Cash for Clunkers sequel is under way. Cash for Appliances is already operating in CT, DE, IL, IN, KS, ME, NJ, OR, RI, VT, and WI, and is scheduled to be rolled out in the remaining states and territories in February, March, and April.

The federal program, which is being managed by the states and territories, is designed to both spur the economy and improve energy efficiency. Rebates of $50 to $250 will be given with the consumer purchase of a qualifying energy-efficient appliance such as a refrigerator, freezer, water heater, air conditioner, heating system, or clothes washer or dryer.

Funding of $300 million was set aside in the Recovery Act and allocated to each state in proportion to its population. The program is allowed to run until February 2012, but can end sooner in each state as its funding runs out. For instance, Delaware has already decided to end its program as of Jan. 31, 2010, after initially saying it would run through Feb. 28, 2010. New York's program is scheduled to last just 10 days in mid-February, wrapped around President's Day.

As with Cash for Clunkers, one of the questions that likely will be raised is whether Cash for Appliances will actually spur the economy, or will simply move up appliance purchases a few months and lead to a drop in sales later. Another question is how the disposal or recycling of old appliances will be managed.

The answers to both of these questions will depend in part on the details of the program that each state has set up. The programs vary dramatically in timing, structure, amount of rebate, determination of who is eligible, and other details. For information on each state program, see:

Along with the cash incentives offered through this program, many states, counties, cities, and utilities have programs designed to spur use of more energy-efficient appliances. In some cases, it may be possible for consumers to get a rebate or tax credit through multiple programs for an appliance purchase.

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