AHAM Gives Majap Rebate Program Mixed Grades, Calls For Revamp

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WASHINGTON — Next year’s Top 100 Major Appliance Retailers Report should show a significant improvement in sales volume, thanks in no small measure to the State Energy Efficient Appliance Rebate Program (SEEARP).

But while the federally funded, statemanaged program boosted springtime sales, and succeeded in its core mandate of stimulating the economy, its ultimate effect on the majap industry was mixed.

That is the assessment of The Association of Home Appliance Manufacturers (AHAM), which found that the so-called “cash-for-appliance” program’s modest funding and complicated rollout limited its effectiveness in saving consumers energy and money.

As a result, the trade association is calling on Congress to renew the effort as a single, nationwide program with more substantial subsidies.

AHAM acknowledged that the rebates, funded through the American Recovery and Reinvestment Act, have been “very successful” in encouraging U.S. consumers to purchase Energy Star-rated appliances. Indeed, many manufacturers experienced a “significant increase” in demand for the energy-efficient white goods covered by the program, AHAM reported, while major retailers have also confi rmed that SEEARP helped bring consumers back into stores.

The impact of the program was reflected in AHAM’s April factory shipment report, which showed a nearly 20 percent increase in unit shipments of major home appliances compared with April 2009. Shipments of core appliances were also up 9.1 percent for the first quarter of 2010, following four consecutive years of declines.

“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,” AHAM president Joseph McGuire said.

While the program’s $300 million funding was significantly less than other stimulus programs, the return of consumers to stores also helped stimulate the purchase of goods other than appliances, AHAM observed.

However, McGuire argued that the program’s limited funding and complicated rollout limited its effectiveness, and AHAM is urging Congress to renew the rebates 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 in the future.


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