Time to turn that old “icebox” into a “nice box” of money.
Okay, bad pun. But the point is: yep, cash for refrigerators. The new measure from the Obama Administration’s national economic stimulus plan will provide you with a rebate for replacing your old “clunker” of a fridge for a shiny, new, high-efficiency model.
While the act will give consumers a nice cash break, it’s doubtful it will do much to revitalize the ailing appliance industry. The more efficient appliances will also help consumers cut down on their monthly electricity bills, while eliminating millions of tons of CO2.
This new act is based on the popular Cash for Clunkers program for old, inefficient cars, except this one will include refrigerators, washing machines, dishwashers, air conditioners, and other energy-hogging household appliances.
Unlike Cash for Clunkers, consumers won’t have to trade in their old appliances. Only the purchase of Energy Star approved devices will qualify for the rebate. Twenty-five states already have similar programs in place (to which this new plan will add more cash), but for the other half of the country, this will be an entirely new opportunity.
The Energy Star designation is overseen by the Department of Energy and the Environmental Protection Agency. Energy Star certifies everything from household appliances, to computers, to lighting, to televisions. About 55 percent of new appliances purchased last year were qualified Energy Star models.
Potential Savings: $200 savings upfront & $100 every year thereafter
The government has put aside $300 million for this new program, which will hand out rebates from $50-$200. The specifics of the plan will vary from state to state, and local officials are required to submit detailed plans to the federal government by October 15. The government predicts that the majority of the $300 million will be already distributed by the end of November.
Buying a new fridge could provide other savings to shoppers as well (besides the government rebate check). According to the Energy Star website, a fridge purchased before 1993 could be costing you over $100 per year in energy costs. New models will cut that cost by at least half.
So what kind of savings are we talking about? Well, let’s create an example of a family replacing a fridge and a dishwasher, and assume the average rebate is $100. The family will save $100 per year in energy costs replacing a fridge from the 1980s, and $30 per year replacing a pre-1994 dishwasher with an Energy Star model. That’s a total of $130 savings on energy per year with an extra $200 from the rebates to help pay for new, high-performing appliances.
Industry Benefits: Questionable
While this program offers a nice cash break for consumers, it’s unlikely that it is enough to get many people to buy new appliances who weren’t already planning to do so. Considering that, it’s doubtful any boost in sales will be enough to offset struggling appliance companies’, such as Whirlpool, Electrolux, and General Electric, steady 15% decline in sales since 2006.
Environmental Benefits: The equivalent of 4 million cars
Common household appliances such as refrigerators are big energy users. How much carbon could Cash for Refrigerators save? 24 million metric tons of CO2
For context, cutting back 24 million metric tons of CO2 is the equivalent of saving the average annual greenhouse gas emissions of over 4 million passenger vehicles. These figures assume 3 million appliances are replaced ($300 million government investment divided by approximate average rebate of $100). This also takes into account the 1,142 kilowatt-hours of electricity saved by replacing a conventional fridge with an Energy Star model.
It’s great that the government is providing a boost to the economy while simultaneously encouraging energy conservation, which raises environmental awareness. But is it too little, too late for an unsteady economy and a troubled home appliance industry?
Time will tell. In the meantime, visit recovery.gov to learn about federal economic stimulus measurements in your state. Plus, learn more about the benefits of replacing old appliances on ecomii.
Click here to learn more about your Carbon Footprint.