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States' ‘Cash For Clunkers' Majap Deadline Nears

9/23/2009 01:20:58 PM Eastern

Washington
- States have until Oct. 15 to submit final applications to participate in a
$300 million federal appliance rebate program.

The effort, part of the Obama administration's economic-stimulus
package, mirrors the auto industry's "cash for clunkers" program in that
purchases of new, energy-efficient appliances will be partially subsidized with
federal funds.

But it differs from the car plan in that each state will run the
program individually, setting its own rules regarding product eligibility,
rebate amounts, payment administration and disposal of old appliances.

According to the Department of Energy (DOE), which oversees the
program, the rebates will likely range from $50 to $200 and will apply only to
Energy Star-qualified products. The DOE is recommending
that states include room air conditioners, clothes washers, dishwashers,
freezers, refrigerators, and home heating and cooling systems in their
eligibility criteria.

The program, which manufacturers had sought for years, was first
authorized as part of a 2005 energy bill, but failed to receive funding. The
plan was revived under the American Recovery and Reinvestment Act amid a
dramatic downturn in appliance demand, which was triggered by the collapsing
housing market and compounded by the recession.

But retailers are mixed on the program's impact. While all hope
it will help revive sales, some fear it will encourage consumers to defer
purchases until after November, when DOE expects to complete most of the
funding. Other dealer concerns expressed to TWICE are:

·        
the lack of provisions for the removal of old
appliances;

·        
that the onus for processing the rebates will
fall on dealers;

·        
that differing state-by-state criteria will
prove an administrative nightmare for multi-regional chains; and

·        
that the $300-million allocation, which only
covers about three-weeks' worth of production, is grossly inadequate.

All 50 states are expected to participate in the program, based
on the number of preliminary applications filed last month. The states must now
file a full application by Oct. 15 that specifies which Energy Star appliance
categories will be included in their rebate programs, the rebate levels for
each product type, how the rebates will be processed, and their plans for
recycling old appliances.

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