Cash For Appliances Program Takes Off

The early results of the federal government's $300 million cash for appliances program evoke the fable the tortoise and the hare.

Cash for appliances is designed to lure people to buy Energy Star appliances that use less electricity, and each state came up with its own rebate program. While some sold out in hours or days, others are still offering rebates months after they launched.

A dozen programs are launching this week to coincide with Earth Day, but the programs that launched earlier this year show that the public responded very differently, depending on the size of the rebates and what appliances qualify.

Running Out Of Rebates

Iowa's program offered such large refunds that the state and retailers warned residents that the program might not last long. But no one imagined that the response would be so great that it would crash a website — and rebates would sell out in the first day.

On the first morning, Smitty's Tire and Appliance in Manchester, Iowa, was full of irate customers, and its four phone lines were ringing off the hook.

That's because no one could get through — by telephone or computer — to the state's cash for appliances program to reserve a rebate.

Smitty's owner, Max Boren, decided to try for himself.

"I had my computer up and I was speed dialing, and I was refreshing and speed dialing for an hour and a half. And finally at 9:30 I said something is wrong," he says.

The website couldn't handle all the traffic and it went down, according to Linda King, who ran the program for the state.

After 45 minutes, it went back up again. And all the rebates were claimed by mid-afternoon, King adds.

Many of Smitty's customers eventually did get through. The store sold more appliances than in any other week of its 55-year history. The most popular item was a basic refrigerator with a freezer on the top at $699.

"There's a $500 rebate on that rascal," Boren says. And a local utility is offering another $100 off.

As delighted as Boren is with the sales, he doesn't think the program did much to stimulate the economy. His store didn't hire anyone extra or even pay any overtime.

"It was a one-time thing and probably not the best use of the money," he says.

And some of his customers are miffed, like the Dureys. They needed to replace their 30-year-old refrigerator, but were frustrated when they tried to get a rebate. They bought an Energy Star refrigerator anyway. Still, Ilona Durey feels bad for other people who really needed the program.

"I mean, maybe they had a dead refrigerator and really were strapped for finances and that's who the program should be concentrating on anyway," Durey says. "So I just thought, it was not well thought out at all."

Rebates went like hotcakes in other states too, including Minnesota, Texas and Arizona.

Tortoise States

But some states, such as New York, offered less generous rewards, and rebates still are available.

Frank Murray, president and CEO of the New York State Energy Research and Development Authority, says his program is putting more energy efficient appliances into homes. He says it also gives a big boost to stores, many of which reported being able to hire when many companies still are passing out pink slips.

"They've been able to hire additional personnel, so all in all, we think it's been quite a success," Murray says.

Indiana's program also could be considered a tortoise. The state only offers refunds for furnaces, air conditioners and heat pumps. In 72 days, the program has spent less than 40 percent of its money.

Brian Redman is a sales manager of Dial One Hour, an Indianapolis company that installs heating and air conditioning units. He says that normally, this is a very slow time of year, and several of his crews likely would be without work and pay. But the rebate program changed that.

"What we've been able to do is keep our employees working when otherwise they might have been laid off," Redman says.

And Redman says that with the rebates and tax credits, about 80 percent of his customers now buy energy-saving units. It used to be less than half did.

Indiana decided to target its program to heating and cooling systems because there is still a big price difference between energy-saving units and those that use more electricity or fuel.

"If you're going to pick one thing that will be the biggest bang for your buck — if you will, the biggest amount of energy savings if you switch from a non-Energy Star to an Energy Star unit — it would be the HVAC (Heating, Ventilation, and Air Conditioning) system. And this program is all about energy efficiency," says Eric Burch, spokesman for the Indiana Office of Energy Development.

Enough To Save Energy

Some states, including New York, offered extra rebates for recycling old appliances. Other states required people to recycle or properly dispose of the old product in order to claim the refund.

Doug Moore, president of appliances for Sears, thinks those programs will have the most impact on energy use and the economy, because otherwise, many people would buy an energy-saving product and keep using their energy-hogging appliance, too.

"It's not good enough to move the refrigerator to the garage and now plug in two refrigerators," he says.

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