Even though the government botched the administration of the recent Cash for Clunkers program, it did stimulate auto sales nationwide. While auto dealers continue to wait for federal reimbursement of customer rebates, appliance dealers are bracing for the rollout of the sequel to Cash for Clunkers appropriately dubbed Cash for Appliances.
The target kickoff date is pre-Christmas and will offer consumers a rebate of up to $200 for purchasing energy efficient appliances. If you’re in the market for new appliances, get your track shoes ready. In total, the government has allocated a paltry $300 million for this program so we might expect the money will run out soon after the program launches. If this program plays out in a similar fashion to the Cash for Clunkers, lawmakers will be voting on additional funding to meet consumer demand.
What’s different with this latest government handout program is that it will be structured and administered by each individual state. Another new twist is that this rebate program does not require that you turn in your old energy inefficient appliance. So what will likely happen to the clunker refrigerator? My best guess is that it gets moved to the basement as an ‘extra’ fridge; passed down to adult children; or sold. So much for cutting energy consumption! There are no restrictions on who is eligible for the rebates so this program seems tailor-made for more wealthy consumers who can afford the added costs of more expensive energy efficient appliances.
While each state will determine which appliance purchases receive rebates, the list will generally include: refrigerators, central heating and air systems, heat pumps, room air conditioners, clothes washers, freezers, water heaters, boilers and furnaces.
In addition to this stimulus project, additional incentives are available as a result of the Emergency Economic Stabilization Act of 2008 passed under former President Bush. Tax credits of 30% are available when you purchase qualifying energy-efficient appliances during calendar years 2009 and 2010 with a maximum credit of $1,500. Additional credits are available for energy-efficient home improvements including insulation, roofing, and window treatments. Also included are credits for alternative energy sources such as solar and wind. These credits are available for both existing homes and new construction.
Finally, be sure to check with your local utility company or appliance dealer. They often provide significant incentives to ‘switch’ to their products.
How much money can you save? You purchase a new energy-efficient tankless water heater for $3,000 versus the standard water heater for $1,000 which does not qualify for the credits. You’d receive a $200 rebate under the Obama plan, plus $900 under the Bush plan, plus a $200 rebate from the local utility (Alabama Power); reducing your cost to $1,700. An estimated 33% savings off your annual utility bill means your breakeven point is less than seven years. Over the estimated thirty-year life of your new water heater, it adds up to quite a bundle on money you save.