“Success” Breeds More Clunkers — Cash For Appliances

Taxpayers get your wallets out. It seems the government was so pleased with the success of their Cash-for-Clunker car program that it cooked up a $300 million spin off “ Cash for Appliances ” before leaving for the August recess. So just in case you missed out on the “free” Cash-for-Clunkers money, you can now get in on a little rebate from the taxpayers and help subsidize the manufacturers and retailers of household appliances by purchasing an Energy Star refrigerator, washing machine, stove, dishwasher, furnace or air-conditioning system.

From Business Week:

Beginning late this fall, the federal program will authorize rebates of roughly $50 to $200 for purchases of high-efficiency appliances that bear the Energy Star seal. The money is part of the broader economic stimulus bill passed earlier this year. Program details—such as which appliances are covered, the exact size of the rebates, and how they get processed—will vary according to each state’s proposals, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications to participate. Washington expects to award the bulk of the money by the end of November.

Forget about the unemployment numbers and home foreclosure numbers and the forecasts for more of the same. Investing in “big ticket” appliances will save you money and save our environment.

Jill Notini, spokeswoman for the Association of Home Appliance Manufacturers told CNBC.com that she is hopeful the program will spur sales, which are down about 15 percent from last year.

The organization also is touting the savings that can come from using more efficient appliances, reports CNBC.com. Notini said in the article that by replacing an eight-year-old washing machine with an energy-efficient one, consumers can typically save 5,000 gallons of water and 600 kilowatt hours of electricity per year, which is about $78 in annual savings.

And even if you can easily afford the purchase, we the taxpayers will help you upgrade to Energy Star appliances. The environment is that important.

From Popsci.com:

Energy Star is much less cut-and-dried [than miles per gallon]. First of all, the joint program between the Department of Energy and the Environmental Protection Agency is a voluntary one. Secondly, it’s not a graded scale — something is either Energy Star-compliant or it isn’t. Third, it’s purposefully not overly demanding. According to Karen Schneider of the EPA, the program’s bar is set exactly at the point where energy efficiency meets affordability. An Energy Star refrigerator is going to be more expensive than its non-Energy Star counterpart, but Energy Star wants you to be able to recoup that extra cost in five years with money saved on utility bills. “We don’t want to make a clothes washer so green that no one can afford to buy it,” Schneider says.

Then, there’s all that Energy Star doesn’t consider. …it does not consider the environmental impact of manufacturing processes, materials used, or what happens to a product at the end of its lifespan. Nor is there any Energy Star-equivalent government program that does. … (According to Schneider, this is something Energy Star is starting to discuss internally.)

So maybe there isn’t a compelling need on the part of homeowners for newer appliances and maybe the environmental impact may not be what it’s cracked up to be, but at least the industry will be happy. Right?

More from Business Week:

Not surprisingly, appliance makers (and their investors) cheered the upcoming government handout. “Whatever gets the consumer back in the marketplace is good for us,” says J.B. Hoyt, director of government relations at Whirlpool, where shares are up 40% since the program was disclosed on July 14. Still, Hoyt allows that “our business has a long way to go in terms of recovery.” Electrolux Chief Executive Hans Straberg, meanwhile, told investors in July he doesn’t expect the market to improve “in the near future.” Electrolux says it is readying “aggressive” marketing programs that will amplify the rebates’ appeal, but is waiting for state plans before providing specifics. Over the next month, appliance makers will lobby state energy commissions to provide the highest possible rebates. “Twenty-five dollars does not get consumers’ attention on a $500 purchase,” Hoyt says.

Okay. Maybe happy is too strong a word. No doubt the home appliance manufacturers and retailers are feeling a little under-stimulated compared to the auto industry’s $3 billion windfall. Still, I have faith in corporate and industry power to cook up a better deal before it is all over. And as a taxpayer, I know I’ll sleep better at night knowing industry and corporations got a boost through this ” Cash for appliances ” program. After all supporting corporations is the American way.

So what industry do you think our government and our tax dollars should subsidize next?

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