Want to ditch> that old window air conditioner that sounds like a jet engine every time you switch it on? Uncle Sam is giving you a little more incentive.
On the heels of the "cash for clunkers" program, which ended Monday, the Department of Energy (DOE) is betting a similar program will inspire consumers to junk their old, electricity-sucking refrigerators, air conditioners and washers to buy new, more energy-efficient models.
The program will be funded by the federal stimulus package but carried out at the state level. The DOE plans to allocate $296 million to the states (and U.S. territories) for the rebate program based on a formula using each state s population. For instance, California s energy office will get $35.2 million while Connecticut will get $838,000. All 50 states and the District of Columbia are participating.
The initiative is designed to retire inefficient home appliances while stimulating the economy at the same time. There s no trade-in provision akin to the clunkers program, so consumers don t need to worry about whether their unwanted dishwasher is inefficient enough. Rebates will be available only for products with the government s Energy Star label, a symbol that the appliance meets energy efficiency guidelines set by the Environmental Protection Agency and the DOE.
Troubled appliance manufacturers are hoping this rebate program will do for them what the clunkers program did for auto makers. Through July, home-appliance shipments were down 15% this year over the same period in 2008, according to the Association of Home Appliance Manufacturers, an industry trade group.
Reimbursement details won t be settled until the fall, when the DOE approves states plans. But for now, here s what you ll need to know to save on appliances at home.
What appliances qualify in your state?
States have the flexibility to choose which Energy Star home appliances to include in their programs and the rebate amount for each. These details are likely to be released in the fall. The DOE recommends that states focus their programs on heating and cooling equipment, appliances and water heaters because these products have the greatest energy-saving potential.
The Energy Star-qualified categories eligible for rebates include central air conditioners, room air conditioners, heat pumps, boilers, furnaces (oil and gas), clothes washers, dishwashers, freezers, refrigerators and water heaters.
For tips on how to cut your electricity bill, read our story
Will your state s existing rebate program disappear?
Some states already have similar rebate programs in place. They typically return $50 to $200 to consumers depending on the product. With the new money from the stimulus bill, which the DOE expects to award by Nov. 30, states can extend or supplement their existing incentive programs. They could increase their rebate amounts or add eligible products to their programs, says Steven Nadler, the executive director of the American Council for an Energy-Efficient Economy, a nonprofit organization that tracks energy policy.
For instance, Colorado already has several programs that encourage residents to purchase energy-efficient products, but we are in the midst of revamping all of them in preparation for spending Recovery Act dollars, says Todd Hartman, a spokesman for the governor s energy office.
States that don t have comparable programs will likely develop new ones after the money is doled out.
How will the program affect utility-company reimbursements?
Utility companies in 22 states offer customers rebates for buying certain energy-efficient home appliances. For example, right now, customers of Rocky Mountain Power in Salt Lake City, Utah, can get up to $75 back when they buy a qualifying Energy Star clothes washer, while customers of Clark Public Utilities in Washington can get a $25 rebate for buying Energy Star refrigerators and $50 for clothes washers.
It s not yet known if consumers will be able to combine state rebates with existing rebates offered by local utilities. The DOE s guidelines require states to take into account existing tax credits and state and utility rebates when setting rebate amounts. The DOE probably doesn t want double dipping, Nadler says.
Consumers can search for current utility rebates by zip code on the DOE s web site. To find out if your state or local utility offers tax incentives or rebates for buying energy-efficient appliances, check the Database of State Incentives for Renewables & Efficiency. Both sites will track changes in rebate programs as details are developed by each state.
For more information on tax credits for making home improvements, such as adding insulation, read our story
What about recycling old appliances?
Consumers can check with their local utilities about what type of appliance recycling programs they offer and whether they offer rebates. For instance, Southern Minnesota Municipal Power Agency offers customers $50 for recycling their old refrigerators and freezers and $25 for bringing in their room air conditioners.
When should you replace an old appliance? Energy Star s rough guideline says to unplug it if it s more than 15 years old; efficiency standards have improved significantly since the early 1990s. Those energy savings alone are going to make getting a new one worth it, says Maria Vargas, a spokeswoman for the Energy Star program. Also consider a purchase if you use a particular appliance a lot say, a clothes washer for a family of six.
What other kinds of retail incentives are available?
As the government sorts out the rebate program with the states, some national retailers have begun to offer consumers their own financial incentives in the spirit of "cash for clunkers."
Toys R Us announced a plan Wednesday that allows consumers to trade in their used cribs, car seats, high chairs and other baby-related items products that are not the best candidates to be handed down or resold for a 20% discount on a new product in the same category and by specific manufacturers. The Great Trade-In program begins Aug. 28 and is scheduled to last through Sept. 20.
High-end clothier Barneys is holding a similar promotion this month that offers shoppers a 20% discount on a new pair of jeans when they bring in an old pair. The offer ends Aug. 31.