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AHAM Gives Rebate Program Mixed Grades

6/09/2010 10:51:53 AM Eastern

Washington - While
the federally funded appliance-rebate program succeeded in stimulating the
economy, its impact on the majap industry was mixed.

That's the
assessment of The Association of Home Appliance Manufacturers (AHAM), which
found that the modest funding and complicated rollout of the State Energy
Efficient Appliance Rebate Programs (SEEARP) limited its effectiveness in
saving consumers energy and money.

The trade
association is also calling on Congress to renew the program as a single,
nationwide program with more sufficient funding.

AHAM acknowledged
that the state-managed cash-for-appliances program , funded through the
American Recovery and Reinvestment Act, has been "very successful" in
encouraging U.S. consumers to purchase Energy Star appliances, with many AHAM
members experiencing a "significant increase" in demand for the energy-efficient
white goods covered by the program. 

Major retailers
have also confirmed that the rebate program has helped bring consumers back
into stores, AHAM said.

Both accounts were
reflected in AHAM's April factory shipment report, which showed a nearly 20
percent increase in shipments of major home appliances compared with April
2009.  Year to date, shipments of core appliances were up 9.1 percent
following four consecutive years of declines.

While the $300
million funding for the rebate program was significantly less than other
stimulus programs, the return of consumers to stores also helped stimulate the
purchase of goods other than appliances, AHAM said. In this regard, the majap-rebate
programs served as a catalyst for additional consumer spending and economic
activity, with the U.S. Department of Energy (DOE) estimating that $1.3 billion
in consumer spending would result from the rebates being offered on home
appliances alone.

"The state rebate
programs, also known as 'cash for appliances,' have had a measurable, positive
impact on the appliance industry," said AHAM president Joseph McGuire.  "People
who were sitting on the fence deciding whether to repair or replace their
appliance were offered a compelling incentive to purchase a new energy
efficient product.  Not only did the rebate serve as an initial discount
on the product, but the new product will offer consumers years of energy and
utility savings,"

He added that 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.

On the downside, "The
limited funding and complicated rollout of the programs limited its
effectiveness," McGuire said, and AHAM is urging Congress to renew the program
with additional funding and process improvements.

Specifically, AHAM
recommends a single, national rebate program instead of 50 separate state
programs, each requiring separate DOE approval and related administrative
costs.  A consistent nationwide program, it argues, would make it much
easier for manufacturers to partner with retailers to develop promotional
campaigns to make consumers aware of the rebates.

 "The large number of individual programs made
it next to impossible for manufacturers to follow all of them and to relay
information to consumers and retailers," McGuire said. "A single program,
supported by focused messaging, Web sites, and information would improve
consumer satisfaction and improve the success of the program."

AHAM noted that funding
appeared to have been allocated more smoothly and more quickly in states that
used a reservation system. Allowing consumers to receive the rebate up
front or at the time of purchase is a much greater incentive than a mail-in procedure,
the trade group observed, and seemed to result in fewer consumer concerns and
should lead to fewer consumer disappointments.

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