Appliance cash won't last long

People will need to act fast if they want to buy an energy-efficient appliance and get a little kickback from Uncle Sam.

Similar to last year's popular Cash for Clunkers, which offered rebates of up to $4,500 for trade-ins of gas guzzlers, “cash for appliances” starts next month in Iowa and mid-April or May 1 in Nebraska.

Congress allocated much less for the appliance program, $300 million compared with $3 billion for the vehicle exchange. But the goals of the programs are the same: Make the United States more energy efficient and boost the economy.

Officials say the money won't last long.

“Less than 30 days and this money will be gone,” said Neil Moseman, director of the Nebraska Energy Office.

States received amounts based on their populations, with about $1 per resident. California, for example, received $35 million. Iowa has about $2.8 million to give away, which it estimates will translate to about 9,100 rebates. Nebraska has about $1.7 million, or enough for 12,000 smaller payments.

“We want to stretch this money as far as we can,” Moseman said.

States were allowed to design their own programs and pick starting dates, with the Department of Energy granting final approval. Nebraska officials say they are wrapping up details of the program.

Walking through the appliance department at Lowe's near 144th Street and West Maple Road, Vicki Sunderman of Omaha said she was looking to replace a dishwasher, a stove and a 32-year-old refrigerator.

“The refrigerator has just got to be eating up electricity,” she said.

Sunderman, who previously was unaware of the rebate program, said she probably will delay her purchases so she can take advantage of it.

Rebate amounts vary depending on the appliance, but generally they will be 5 percent to 15 percent of the purchase price. Appliances eligible under the program include refrigerators, air conditioners, furnaces, clothes washers and dishwashers.

For example, a Nebraskan buying a refrigerator for $1,198 would get a $100 rebate, or about 8 percent of the price. A $797 clothes washer would bring a $200 rebate, or about 25 percent of the price.

Meghan O'Brien, a retail economist at Iowa State University, said the program's major beneficiaries will be retailers whose sales declined when construction of new homes stalled. The program is too small to stimulate the overall economy, she said.

Cash for Clunkers didn't have a long-term economic impact either, O'Brien said.

Large appliances are considered durable goods, which are defined as products meant to last three years or more. The production and purchase of durable goods are considered important indicators of the nation's economic health.

Nebraska lost 12 percent of its durable goods manufacturing jobs last year, and forecasters expect an additional 3 percent decline in 2010 before posting 2.4 percent growth in 2011.

Iowa lost 14.5 percent of its durable goods manufacturing jobs in 2009, with little growth expected in 2010.

Dan Otto, an economics professor at Iowa State, said he doesn't expect “cash for appliances” to have a noticeable impact on durable goods manufacturing, although that clearly is one of the goals.

“It's part of that attempt to increase demand,” Otto said.

The rebates are likely to simply persuade people who were considering purchases to go ahead, he said.

Shina Mertz of Beatrice, Neb., said she and her husband, Asher, investigated “cash for appliances,” although they already planned to buy an energy-efficient dishwasher and refrigerator.

“It's kind of nice, but it isn't really necessary,” Mertz said.

Locally owned appliance stores and national chains are gearing up for the program.

“We're excited about it,” said Abby Buford, a national spokeswoman for Lowe's, which has five stores in Nebraska and 11 stores in Iowa.

Some retailers said the program was too complicated, there aren't enough coupons and the higher cost of energy-efficient appliances could deter buyers.

For example, a highly efficient refrigerator could cost $2,000, while a less-efficient model might be only $600, said Lori Studer, who with her husband owns Denison Do It Best Hardware in Denison, Iowa.

“It's good to have Energy Star things, but if people don't have that money” they won't buy the appliance, Studer said.

But a retailer in Glenwood, Iowa, said every little bit helps.

“Hopefully, if nothing else, it will get some people in the door,” said Don Malcom, owner of Don's Furniture & Appliance Co.

Contact the writer: 444-1117, joe.ruff@owh.com

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