Clunkers sequel: Funds for fridges?

First there was Cash for Clunkers. Now there will be, uh, funds for fridges.
Rhode Island is set to receive a share of a $300 million federal program that will offer rebates for consumers who turn in their old home appliances for new, energy-efficient ones.
It’s similar to the $3 billion Cars Allowance Rebate System – popularly known as Cash for Clunkers – that over the summer helped prop up a sagging auto industry, from manufacturers to dealerships.
Aside from lacking a catchy name, the appliance version differs in that the amount of available money is much smaller, and the federal government is leaving it to the states to design a program for their residents.
The R.I. Office of Energy Resources has submitted its preliminary application, signaling its desire to participate, and state officials say they’ve been promised $1.01 million.
Massachusetts is set to receive $6.23 million and Connecticut $3.36 million. California will get the largest appropriation at $35.27 million, according to the U.S. Department of Energy (DOE).
Now the states must assemble plans by Oct. 15 on how they want to distribute the money, a plan that must be approved by the DOE.
David Cordeiro, spokesman for the R.I. Office of Energy Resources, said the state has already received $100,000 to cover the cost of developing and administering the program.
Next on the to-do list: Pick what appliances to make eligible for the program, and devise a way for the old appliances to be destroyed and for the process to be monitored.
“These old appliances can have environmentally dangerous chemicals that need to be disposed of and recycled,” Cordeiro said.
State energy officials plan to meet with representatives from the utility company National Grid to develop the program’s outlines, but early indications are that the state might want to piggyback on an existing National Grid program that pays consumers to turn in older, energy-wasting refrigerators. “That might be the most efficient way of doing it,” Cordeiro said. “It makes all the sense in the world. But it’s really premature to talk about it.”
In announcing the program in July, the U.S. Department of Energy said the state-run rebates must require a purchase of a new Energy Star-qualified appliance. Energy Star is a government-run program that labels energy-efficient consumer products.
The DOE guidelines say states should focus on appliances in 10 categories: central and room air conditioners, heat pumps, boilers, furnaces, clothes washers, dishwashers, water heaters, freezers and refrigerators.
While work on the program begins, Cordeiro noted that $58 million in federal stimulus money has been earmarked for other energy projects in Rhode Island.
“The appliance rebate is a very small part of it,” he said.
Still, with the success of Cash for Clunkers, interest is growing in the appliance equivalent.
Word about the program has circulated among appliance store owners in recent weeks.
Lisa Sienkiewicz, co-owner of Gil’s Television and Appliances, said she, of course, would welcome any program that gets customers in the door. Sales this year are down about 9 percent from this time last year.
But so far, she’s not expecting much.
Responding to questions about the appliance program, the buying group with which Gil’s and many other independent stores are affiliated recently informed its members that no federal money has been made available yet.
But Sienkiewicz said there are other rebates already available.
The buyers group – the Boston Group – is offering rebates to stores, which in the case of Gil’s has been passed to the customers, she said.
And appliance manufacturers have already tacked on their own rebates in many cases to spur sales in a down economy.
“The manufacturers have really stepped up to the plate,” Sienkiewicz said.
For instance, a $700 front-loading clothes washer – generally considered to be more energy efficient compared with top loaders – might feature a $50 manufacturer’s rebate plus another $75 rebate from the buying group. What’s hurting sales, Sienkiewicz said, is the lack of new construction in a weak economy. Some consumers are instead turning to remodeling and updating.
Those customers are certainly price-conscious, Sienkiewicz said, but more and more they are asking about energy efficiency, particularly as the utility companies look to raise rates.
When it comes to the federal program, there’s a problem for manufacturers and retailers. Because each state is designing its own guidelines, makers and sellers don’t know which appliances to produce more of and which to stock up.
Sienkiewicz said it’s more a concern for her buying group because orders at the store are filled at the group warehouse in Massachusetts. The Boston Group didn’t immediately return a call seeking comment.
Cordeiro said it makes sense for the Rhode Island program to dedicate a large portion of the rebates on refrigerators because, unlike other household appliances, refrigerators run nearly continuously.
David Graves, National Grid spokesman, confirmed that the state has requested a meeting to discuss the program, but he wasn’t aware of the state’s interest in the utility’s refrigerator recycling program.
Under the National Grid program, customers in Massachusetts and Rhode Island can receive $50 for turning in older, energy-inefficient fridges and freezers. National Grid is targeting the second refrigerator in the basement or garage of many homes, Graves said.
The utility also picks up the appliance, which is recycled at JACO Environmental in Franklin, Mass. National Grid had set a goal of disposing of 6,000 old refrigerators in Rhode Island alone. So far, 2,000 have been carted away.
National Grid says refrigerators built before 1990 can use three times more electricity than new appliances and can cost a typical household up to $150 a year to run. •