Home appliance sales are down about 15 percent this year so it comes as no surprise that manufacturers and sellers are enthusiastic about the start of a new federal program, administered by the states, that will provide consumers with rebates up to $200 for buying new, more energy efficient models to replace older units.
The Association of Home Appliance Manufacturers (AHAM) in June provided a strong endorsement of the program, funded at $300 million as part of the federal economic stimulus program, saying it would "stimulate demand for home appliances, provide consumers with tremendous savings on the initial purchase cost and long?term utility costs of appliances, and will also provide an important environmental benefit by way of a significant decrease in energy consumption."
Jill Notini, a spokesperson for AHAM, told CNBC, that a consumer replacing an eight-year-old washer with an Energy Star model can save about $78 dollars a year in water and electricity.
According to a Wall Street Journal report, the $300 million for the program was originally approved as part of energy legislation in 2005 but never funded by the government. Because the program is being administered by the states, each had to confirm their participation by Aug. 15. Now that all 50 states have opted-in, they will have until Oct. 15 to draft details on its execution. Funds provided by the federal government are calculated by the population of each state.
Discussion Questions: Will the federal rebate program stimulate home appliance sales? Is this sort of public funding necessary? What can retailers do to use this program to stimulate even further sales activity?