The popularity of Cash for Clunkers has built excitement for the government's next program to stimulate the economy and save energy: cash for appliances.
In June, the Department of Energy said it is making $300 million in stimulus-act money available to state energy offices to offer rebates on energy-efficient household appliances.
Unlike the $3 billion clunkers program, which required an old car to be traded in, consumers do not have to turn in an old appliance to get a rebate on a new one.
Another difference: The clunkers program was consistent nationwide, but each state can decide which appliance categories will be eligible for rebates, how energy efficient they must be, the amount of the rebates, whether they can be combined with other rebates, how the money will be tracked, and how consumers and retailers will know when it is about to run out.
The U.S. Energy Department says appliances eligible for federal rebates include central air conditioners, heat pumps (air source and geothermal), boilers, furnaces (oil and gas), room air conditioners, clothes washers, dishwashers, freezers, refrigerators and water heaters. States don't have to include all these appliances in their programs. They can propose additional ones, which will be reviewed on a case-by-case basis, an Energy Department spokeswoman says.
To qualify, an appliance must carry the U.S. government's Energy Star label, but states could require even higher energy-efficiency ratings such as those put out by the Consortium for Energy Efficiency.
The consortium, a nonprofit group whose members include many utilities, rates appliances Tier 1, 2 or 3. Tier 1 is roughly equal to Energy Star; Tier 3 is the most energy efficient. Some utilities that offer rebates require certain appliances to be rated Tier 2 or 3.
Some appliance manufacturers want the energy department to develop national standards for the rebate program so it's easier to advertise and they know which appliances will sell out quickly.
But Marc Hoffman, executive director of the Consortium for Energy Efficiency, says appliance retailers have a lot of experience advertising rebates at the local level.
"One of the big differences between this and clunkers is that it's more local than national. It has been run by local utilities with local retailers, even if they are part of a national chain. Car dealers are all tied to national manufacturers. But consumers don't buy appliances from Whirlpool."
Hoffman encourages state energy offices to work with local utilities, some of which have 20 years of experience with rebates. "They have experience not setting (the rebate) higher than it needs to be and in modulating supply to match demand," he says.
Hoffman says that with the clunker program, "you had a lot of free riders," people who were going to buy a car anyway but just bought it sooner because of the rebate.
If the rebate applies to every Energy Star appliance, you will have a lot of free riders because so many people purchase them anyway. If you limit rebates to Tier 2 and 3 models, you push more people who were going to buy an appliance anyway to buy a more efficient one. "You minimize the free riders," he says.
Consumers hoping to get an appliance rebate might have to act fast.
Congress originally allocated $1 billion to the clunkers program, which started July 24 and was supposed to last until Nov. 1. When that money nearly ran out in a week, Congress added an extra $2 billion. The program ended Monday.
(E-mail Kathleen Pender at kpender(at)sfchronicle.com. For more stories visit scrippsnews.com)
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
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