Energy-Efficient Appliance Rebate Program Helps Consumers, States, Businesses

August 5, 2010

Photo of two men in an appliance
store showroom. The man on the left is sitting on a desk and smiling at the
camera. The man on the right is pushing a dolly with a clothes dryer on it.

Bob Hurst and son Mark of The Appliance Center in Panama City, Florida, posted a record-breaking weekend of sales thanks to the State Energy Efficient Appliance Rebate Program.
Photo courtesy of Mark Hurst

The U.S. Department of Energy's (DOE) State Energy Efficient Appliance Rebate Program (SEEARP) is a superb example of a federal stimulus program that is really working. Launched in December 2009 and supported by nearly $300 million in funds from the 2009 American Recovery and Reinvestment Act, SEEARP is working with every U.S. state and territory to give consumers cash incentives to replace older, inefficient appliances with new ENERGY STAR® qualified appliances. Consumers can receive rebates ranging from $20 to $2,000 on such items as dishwashers, clothes washers, cooling and heating equipment, refrigerators, and water heaters. These rebates have put efficient appliances within the reach of many consumers who would not have been able to afford them.

Several low-income consumers in Kansas said it best in thank-you notes to the state: "This is the first time I can afford a new appliance." "It's beyond my dreams!" "It gives me hope that I'll make it as a homeowner."

With the rebates, the cost of the ENERGY STAR qualified appliances was so much less that many consumers were able to afford additional appliances as well. Retailers reported that instead of purchasing only a new clothes washer, for example, many customers also purchased the accompanying dryer.

Each U.S. state and territory developed its own program, subject to DOE review and approval, to support its particular energy needs. Therefore, eligibility guidelines, covered products, and rebate amounts differ by state.

Most state energy offices have focused on equipment that will produce the biggest energy savings and make the biggest cost differences for their consumers. Where applicable, many consumers are also combining the SEEARP rebates with federal tax credits, utility incentives, manufacturer rebates, and retailer rebates for even greater savings.

In a few states, rebates were gone in a day, to the consernation of consumers who didn't apply in time. In some states, product hasn't moved as quickly. But despite these bumps and bruises, the program overall has been enormously successful, accomplishing just what an economic stimulus should as consumers have purchased thousands of appliances, states are tabulating sales tax revenue, and retailers and manufacturers are posting profits and hiring staff to keep up. While sales data are just being reported to DOE, the program is projected to save Americans $874 million in energy and water costs over the lifetimeof the products, representing reductions in national consumption of 3.4 billion kilowatt-hours of electricity, 210 million therms of natural gas, 10 million gallons of oil, 9 million cubic feet of propane, and 43 billion gallons of water.

Retailers nationwide have seen a big jump in sales and foot traffic due to the rebates, Store managers in many states have reported standing-room-only crowds. "Black Friday-like floor traffic," and highest sales ever. "In two days (Friday and Saturday) we grossed $160,000 in sales," says Bob Hurst of The Appliance Center in Panama City, Florida. "I believe that is more than we have ever done in one month during our 62 years of existence, let alone two days!"

State energy office staff throughout the country also reported gains for retailers and their states. "In very real ways, this has stimulated our economy and moved money in North Carolina," said Seth Effron, communications director for the North Carolina State Energy Office. "We've taken federal funds and turned that into $64 million in retail sales."

Increased demand for appliances has also created new jobs for manufacturing employees. A General Electric plant in Louisville, Kentucky, added more than 100 jobs to satisfy consumers' appetite for appliances.

The Association of Home Appliance Manufacturers (AHAM) credits SEEARP with stimulating economic activity and encouraging U.S. consumers to purchase appliances. "The state rebate programs have had a measurable, positive impact on the appliance industry," says Joseph M. McGuire, AHAM president. "The program contributed to increased demand for energy efficient appliances, which in turn had a positive impact on jobs related to appliance manufacturing and sales." AHAM's factory shipment report for April showed almost a 20% increase in shipments of major home appliances compared to April 2009, according to the association's June 8 press release..

Program design rules also require that rebates be used to replace existing appliances. As such, most states' rebate guidelines encourage recycling of old appliances and 13 states require it. Seven states offer additional rebates for recycling.

Karen Loida, program manager for the Minnesota Department of Commerce, Office of Energy Security, noted that the program was extremely effective in educating residents about the need to properly recycle old appliances. In the Northern Mariana Islands, the program helped to launch the territory's first program to recycle appliances. West Virginia, an enthusiastic SEEARP partner, took its commitment to recycling a step further, becoming the first state to join EPA's Responsible Appliance Disposal Program.  

For more information, visit www.energysavers.gov/rebates.