The government just recently finished spending $3 Billion dollars on the Cash for Clunkers program that by some accounts was fairly successful. By other accounts it didn’t quite live up to what it promised, but either way, it is very clear that the American public responded quickly to the offer. As a result I have been hearing rumors about a Cash for Clunkers type program geared towards old appliances.
I did a little digging to find out some of the proposed details of the program. It seems like no one has really settled on a name yet – I have seen it called “Cash for Appliances” and “Cash for Refrigerators”. So as the final details get settled, I assume the program’s name will be sealed as well.
Tentative details of the Cash for Appliances program
- The program would give you $50-$200 rebate for choosing a new energy efficient appliance. The State Governments will have a say in the amount paid out.
- $300 Million dollars have been set aside for the program by the federal government as part of the American Recovery and Reinvestment Act of 2009.
- The “Cash for Appliances” program is expected to roll out in November of 2009.
- No trade in of an old appliance will be required to get the rebate.
- Only appliances that are covered by Energy Star will qualify for the rebate.
What is the purpose of the program
Just like the Cash for Clunkers program, this one has a dual purpose as well. The goals are to boost the ailing appliance industry (GE, Whirlpool, Electrolux, and other big names have been struggling and have laid off many workers) as well as help the environment by decreasing the number of inefficient appliances out there.
My thoughts on the program
Personally, I like the idea of this program a lot more than the Clunkers program. The deal offered for the Clunkers program really wasn’t much of a deal in my opinion. My hunch is that it actually harmed many Americans because they now had an extra incentive to run out and buy a new car. With the drastic depreciation rates of new cars, it is rarely a good idea to buy a brand new car when you could choose a 2-year old option (see Dave Ramsey’s argument for buying used cars).
But with the new Appliance Bill, consumers will likely benefit more. Not only will they get the rebate from the government, but in many cases the new appliances may pay for themselves over time. A 10-year old refrigerator often uses 3 times as much energy as the newer models. Many consumers will be greatly decreasing their energy bills each month by replacing old appliances with new ones.
So, as the details are finalized keep an eye out for the program to start in a month or so…