Bush Enacts Majap-Friendly Energy Bill

By Alan Wolf On Aug 22 2005 - 6:00am




President Bush has signed into law a federal energy bill that could help boost sales of energy-efficient appliances by providing tax credits to vendors who make them and rebates to consumers who buy them.

The credit, which only applies to domestic production, provides manufacturers with a tax break of $50 to $175 for each super-efficient appliance produced in excess of a rolling baseline. The baseline is the average number of appliances produced in the previous three calendar years that qualify under federal standards established by the U.S. Department of Energy (DOE) under its Energy Star program. The maximum credit for each majap maker is $75 million over a two-year period beginning in 2006.

Other provisions include expanded programs for state-sponsored incentives, including authorization of up to $250 million over five years to provide rebates to consumers purchasing energy efficient appliances. Shoppers who replace an older appliance with an Energy Star-labeled model can reduce their taxes by 10 percent of the price of the new unit, up to a certain threshold.

To earn an Energy Star rating from the DOE, appliances must use less energy than the minimum efficiency standard set for each category.

Vendors, particularly those with significant domestic production, lauded the new energy act. “The appliance manufacturers' tax credit will support our future product innovations and is expected to have a positive impact on the company's overall financial performance,” said Maytag's chairman/CEO Ralph Hake. “In addition, the energy bill is a winning proposition for both the consumers and the environment.” Maytag could conceivably earn tens of millions of dollars in tax credits under the new law, the company said.

Franz Bosshard, CEO of BSH Home Appliances, said, “This forward-thinking decision provides an incentive to appliance manufacturers to expand their production of energy-conserving products that have a positive impact on the environment.”

BSH maintains a major manufacturing facility in North Carolina for its Bosch line of ranges, dishwashers and laundry products.

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