AHAM Gives Rebate Program Mixed Grades

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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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