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Home » Appliance rebates spark mixed views

Appliance rebates spark mixed views

Anticipated arrival of $300 million might be hurting demand now

—Staff photo by David Cole
—Staff photo by David Cole
September 17, 2009
David Cole

Appliance dealers here say an anticipated federal program that will provide rebates to consumers who buy qualified energy-efficient home appliances should boost sales, but for now might be dampening demand as buyers wait for details of the program to emerge.

The program, announced by the U.S. Department of Energy this summer, will allocate nearly $300 million in federal stimulus funding for the rebates, including an expected $6.3 million in Washington state and $1.5 million in Idaho. State governments will design and operate the rebate programs, though their plans must be approved by the DOE.

Rick Sauer, store manager of a Lowe's Home Improvement Warehouse, at 6902 N. Division here, says some customers are waiting to see what Washington state's version of the program will look like before buying a new appliance.

Still, he says, the rebates definitely will stoke buyer interest.

"There's probably some pent-up demand," says Sauer. He adds that he's sure rebates contribute to sales.

Says Troy Varness, general manager of Fred's Appliance Inc.'s store at 2525 N. Monroe, "I've got mixed emotions about it."

Varness says the upcoming program will be good, because the rebates, which consumers will be able to combine with other rebates already being offered, will entice customers to buy an appliance earlier than they might need to, or buy a more expensive model than they would have otherwise. On the downside, however, the program likely will run out of money quickly, he says, and he believes it was announced too early, causing customers to put off buying until they knew more about the details.

Also, he says, as of right now there's no plan to get older appliances off line and recycled, and if Washington and Idaho come up with different plans, that could cause confusion and other problems as well.

"There's just some really tough things that have to be addressed," Varness says.

States are making plans to implement the program, which could begin providing rebates early next year, says Chuck Murray, a senior energy policy specialist at the Washington state Department of Commerce, which is putting together the state's plan with help from utilities. Each state is required to submit a plan that specifies which Energy Star appliance categories will be included in its rebate program, the rebate level for each type of product, how the rebates will be processed, and how the state will provide for recycling old appliances. Utilities such as Spokane-based Avista Corp. already have appliance recycling programs in place. Murray says the state is considering in its plan "a mechanism that ensures (older) appliances are recycled."

Energy Star is a joint program of the U.S. Environmental Protection Agency and the DOE that covers more than 60 product categories. DOE has recommended that states focus their programs on products that offer the greatest energy-savings potential. Energy Star qualified appliance categories eligible for rebates include: central air-conditioners; heat pumps; boilers; oil and gas furnaces; room air-conditioners; clothes washers; dishwashers; and water heaters.

Some rebates already are available to consumers through other programs. Avista already offers rebates ranging from $20 to $50 for certain Energy Star appliances, and sewer-service-area residents of the city of Spokane and Spokane County can get up to a $100 rebate for the purchase of an Energy Star clothes washer. Some manufacturers also are offering rebates, says Varness.

He says he's heard that the federal rebates will range from $50 to $200, depending on the appliance.

"We're not far enough down the road to say exactly what will happen," Murray says. He says the plans must be submitted to DOE by Oct. 15.

"I don't think we're going to get a jump on that (date)," he says.

The rebates aren't likely to be available to Washington consumers before January, Murray says. "Hopefully this will help (retailers) for their end of January slump," he says.

Avista spokeswoman Debbie Simock says the Spokane utility currently pays customers $30 to recycle older refrigerators and freezers that the utility picks up. To be eligible, a participant must be an electric customer of Avista, and the refrigerator or freezer has to be in good working condition and must have been made in 1995 or earlier. Avista customers using an average of 1,000 kilowatt-hours of electricity per month pay about $3 a month toward Avista's energy-efficiency programs. The utility uses those funds to pay for rebates, such as for new Energy Star home appliances and recycling of older appliances.

Chris Kielich, a DOE spokeswoman in Washington, D.C., says the upcoming federal rebate program will come out on a "rolling basis," so the sooner states turn in their plans, the sooner rebates will be available to their residents.

Kielich says the allocation to each state of the $300 million total will be based on population, hence the difference between what Washington and Idaho will get. The department says states will receive 10 percent of their allotted funds after submitting their plan, with the balance awarded after their plans are approved. It anticipates that a vast majority of the funding will be awarded by the end of November.

Murray says it's likely that utilities in Washington will pay out the rebates and be reimbursed with stimulus funds. Since utilities already are offering energy-efficiency rebates to their customers, having them handle the federal program would be an efficient way to run the program, he says.

Paul Kjellander, administrator of the Idaho Office of Energy Resources, says rebates from the federal program likely will be handled by utilities in Idaho, which should ensure "we don't have to reinvent the wheel," he says.

He says the program should help businesses and individual consumers who've been hard hit by the recession, and adds that the agency hopes to get its plan finished as soon as possible so it can make funds available.

"The money is doing us no good if it's just sitting in somebody else's account," Kjellander says. "We need to get it deployed."

Kathryn Gallagher, an Orange, Calif.-based spokeswoman for The Home Depot, the big home-improvement chain, says, "We think it's a great program. No matter what, we're going to participate."

She says she can't comment on what type of sales boost the company anticipates getting from the rebate program once it starts. Still, she says, "I can't imagine it will hurt us."

Gallagher adds, "It will definitely bring in some business," and augment other rebates available to consumers.

Larry Costello, a Chicago-based spokesman for Sears Holdings Corp., says Sears stores will "be making it as easy as possible to utilize these rebates."

He adds, "We'll definitely be participating in a big way."

Darcie McMaken, an appliance sales specialist at the North Side Lowe's in Spokane, says customers trust the Energy Star label. She says she's heard from customers that they believe Energy Star appliances are not only are more energy efficient, but also use less water and soap.

The label helps sell appliances, she says. "That's a factor, for sure," McMaken says.

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