Appliance Rebates Come And Go, Quickly

By TOM ZELLER Jr. and CATHARINE SKIPP
April 19, 2010

Whether it is newfound green consciousness ahead of Earth Day — or just the allure of a big discount on a new washing machine or air-conditioner — consumers across the country are snapping up government rebates for energy-efficient appliances.

In Florida, which began offering the rebates Friday, the $17.6 million allocated for the program lasted a day and half, as more than 72,000 claims were filed. In Illinois, the second half of its $12.4 million, made available on Friday, disappeared in 11 hours.

In Missouri, which started doling out $5.67 million in rebates on Monday and was also waiving related sales taxes, applications were brisk. "Right now, we're reserving about a thousand an hour," said Judd Slivka, a spokesman for the Missouri Department of Natural Resources, in a midday interview. "Dishwashers are huge. They're selling like hotcakes."

Nationwide, $300 million in rebate money has been allocated by the federal government to 56 states and territories to encourage residents to buy furnaces, clothes washers, refrigerators and other appliances with the government's Energy Star label. Typically, rebates run about $75 for a clothes washer and several hundred dollars for home heating and cooling systems. Colorado, which began its rebate program Monday, is offering $15,000 back for installing a commercial solar thermal system.

But in an experience reminiscent of last year's popular "cash for clunkers" program, which paid consumers to trade in gas-guzzling automobiles, interest in the appliance programs has been so been intense that the state programs are often running dry in a matter of days.

In some cases, retailers and states have been promoting the rebates ahead of time, allowing shoppers to plot their strategy as carefully as a Black Friday assault.

For example, Melissa Woodall, a single mother of three in Miami, said she began scanning appliance ads a few weeks ago in search of a new stove. She noticed an article about the rebates and decided to replace her old leaky dishwasher and refrigerator.

The day before qualified purchases were allowed, she visited a Sears store to pick out the appliances. On Friday, she arrived at the store at 6:30 a.m. and found 49 customers in line. Fortunately for her, the store had given her a printout the night before, so all she had to do was pay and set up delivery. But that still took an hour and a half in the crowded store.

And the ordeal was not over, Ms. Woodall said — she still had to get the rebate itself. At 11 a.m., when online signups began, she and her sister jumped onto the state's rebate site. "The Web site was flooded. It kept crashing," she said in a telephone interview. It took her an hour and fifteen minutes to get registered for the rebate.

Ultimately, it was worth it, Ms. Woodall said: she paid about $1,500 for the dishwasher and fridge and will be getting back about $500.

Each state has structured its own program, sometimes excluding certain appliances like air-conditioners or requiring proof that old appliances were recycled before paying out the cash. The amount of money available varies widely, from more than $35 million in California, where the program is scheduled to start on Thursday in connection with Earth Day, to $100,000 in American Samoa.

For advocates of energy efficiency and those seeking a lift for a still-ailing economy, the strong response has been a welcome sign — though not everyone has been pleased.

In Texas, where reservations for a mail-in rebate program were accepted by phone or online earlier this month, the dedicated Web site failed almost immediately, according to state regulators, and the phone lines were overloaded.

By 2 p.m. on April 7, just seven hours after the Texas program opened for business, all rebate reservations were taken. Places on a subsequent waiting list were filled by 6 p.m.

The state blamed a contractor for its problems. Susan Combs, the Texas comptroller of public accounts, complained: "It is not acceptable that thousands of Texans spent hours trying to reserve appliance rebates on Wednesday, April 7, only to be met with dropped calls and an unavailable online reservation system."

After studying the experience of Texas and other states, Missouri decided to implement a phased rebate system. Through Tuesday, consumers can only apply for rebates through a retailer or appliance installer. Starting Wednesday, they can seek the money directly through the state.

"This is a way of controlling points of access into the system, so we don't oversubscribe and people end up really frustrated," said Mr. Slivka, the spokesman for the agency running the program.

Illinois took another approach, pushing all of the paperwork hassles onto retailers, which were required to give instant rebates to the customer and recover the funds from the state. "It was easier on the customer," said Michael Abt, president of Abt Electronics in the Chicago area.

Mr. Abt said that the state paid his company promptly after the first phase of rebates in January, which applied to heaters and hot water heaters, and he expected to get paid within a month for Friday's phase, which covered other appliances.

The federal government created the appliance rebate program as part of the 2009 stimulus legislation, and retailers say it has boosted sales.

"We're not use to having people line up to buy appliances, except maybe in a Black Friday sort of situation," said Doug Moore, the president of home appliances for Sears Holdings, referring to the traditional shopping free-for-all on the Friday after Thanksgiving. "But we're excited to see all these customers."

According to Mr. Moore, the turnout is understandable, given that the rebate programs come on top of existing discounts on Energy Star appliances, recycling and take-back rebates for old units, and specials provided by individual retailers. In some cases, consumers may qualify for federal or state tax credits, too.

Kateri Callahan, the president of the Alliance to Save Energy, a non-profit coalition that promotes efficiency measures, praised the rebates as stimulating the economy while providing "an immediate, point-of-purchase, incentive for consumers by 'buying down' the price of new, energy-efficient appliances."

BrandsMart USA, an electronics and appliance superstore with nine locations in Florida and Georgia, said that customer interest was so strong Friday and Saturday, when Florida's rebates were available, that the chain decided to offer its own discounts after the state money ran out. "We are still getting a lot of business from it," said Bobby Johnson, a senior vice president at the company.

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