A $300 million cash-for-clunkers-style federal program - being referred to as Cash For Refrigerators - to boost sales of energy-efficient home appliances provides a bit of hope for beleaguered makers of washing machines and dishwashers, but it may not be enough to lift companies such as Whirlpool and Electrolux out of the worst down cycle in the sector's history.
Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of October 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. (Unlike the cash-for-clunkers auto program, consumers won't have to trade in their old appliances.)
"These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy," Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and the EPA.
The money can't come soon enough for the home appliance industry, which is mired in an unprecedented sales slump that began when the housing market cooled in 2006. Since then that slump has worsened considerably. Shipments of washers, dryers, refrigerators, and ovens dropped 10% in 2008 and are down 15% through July, according to the Association of Home Appliance Manufacturers.
Unlike the wildly popular $3 billion cash-for-clunkers vehicle program, which ended on Aug. 24, there's no guarantee that hard-hit consumers are prepared to plump for new washers, stoves, and fridges. The federal outlay will piggyback on rebate programs for energy-saving appliances that have existed for years in more than 25 states, but which have largely failed to spur demand. Home improvement retailers like Home Depot and Lowe's have also offered deep discounts on big-ticket appliances lately, with little impact.