Rebates and tax credits can lower appliance costs

While you might have back-burnered your plans for a kitchen remodel or a new laundry room, you can’t ignore an ailing dishwasher, a struggling refrigerator, or a washed-up clothes washer.

Fixing these appliances could be an option—see our repair-or-replace-it guide (available to subscribers)—but when you decide to replace appliances, consider more-energy-efficient models. This is one way to spend your federal economic-stimulus payment. And, as unlikely as it might seem, you can also turn to your utility company and the state and local government for some financial relief.

As of mid-May, the Database of State Incentives for Renewables & Efficiency, maintained by North Carolina State University’s Solar Center with funding from the U.S. Department of Energy, lists 732 utility rebate and loan programs for consumers who buy energy-efficient appliances or other home systems. (The DSIRE's map is shown.) The site also includes details on 35 state rebate and loan programs and 13 personal-income-tax-credit or tax-holiday plans.

You’ll also fund information on rebate and tax-credit programs from utilities, states, and partners at the U.S. Environmental Protection Agency’s Partner Activities search; if you don’t see a program listed for your area, look on your utility bill for more information or contact your state taxation office.

These programs can offset the short-term acquisition and long-term operating costs of new appliances. Here’s how to take advantage of these opportunities:

Plug into utility companies’ rebates. Contact the efficiency program at your utility company, which might offer rebates on appliance purchases. Depending on the  offering, you might need to buy either an Energy Star–qualified appliance or one that meets higher efficiency levels, such as a Consortium for Energy Efficiency (CEE) tier. For example, a CEE Tier 1 dishwasher must have an Energy Factor (the number of loads that can be washed per kilowatt-hour) of 0.65 and can't use more than 339 kWh per year, while a Tier 2 model must have an Energy Factor of 0.68 and use no more than 325 kWh annually.

 

In California, the Sacramento Municipal Utility District is offering a $25 rebate on a Tier 1 dishwasher and $75 on a Tier 2 model, provided you’re using an electric water heater in your home. In Oregon, the Columbia River Public Utility District ups the ante to a $100 rebate for a Tier 2 clothes washer that uses water from an electric heater, and $50 for one with water heated by gas, oil, or propane.

Brian Lips, a policy analyst at the North Carolina Solar Center at North Carolina State, notes that even if they don’t offer a rebate, many utilities will offer free pickup of an old refrigerator, saving you the disposal fee. 

Take a tax holiday. This Memorial Day weekend, Texas residents will get a break from state and local sales and use taxes on purchases of energy-efficient air conditioners, clothes washers, ceiling fans, dehumidifiers, dishwashers, lightbulbs, programmable thermostats, and refrigerators that cost less than $2,000.

Similar tax holidays are set for Georgia and Virginia in October 2008. “We’ve been dealing with a drought here, so the legislature decided to include water-efficient appliances in the program,” said Shane Hix, director of public affairs for the Georgia Environmental Facilities Authority.

Legislation pending in Missouri would inaugurate a “Show-Me Green” tax holiday from November 7-13 of this year then move it permanently to April 15-18 to coincide with Earth Day.

Combine tax credits and rebates. Oregon residents can also take advantage of a state tax credit of $90 for a refrigerator rated 30 percent more efficient than 2001 models. Similar tax credits for dishwashers range from $60 to $80, and for washing machines, they’re as high as $180. Oregonians who combine the state tax credit with the Columbia River Public Utility District rebate can get considerable savings. One of Consumer Reports’ top-rated washing machines—the Frigidaire Gallery GLTF2940F, $650—qualifies for both the state’s $180 tax credit and a $100 rebate because of its Modified Energy Factor (MEF) above 1.80, notes Michael Riegelmann, of Riegelmann’s Appliances in Gresham, Oregon.

Keep the big picture in mind. If you’re not in the market for new appliances, learn about other energy savings by running the U.S. Department of Energy’s online energy audit for your home and checking the DOE’s rebates page for other home components. And don’t forget to consider whole-house consumption in mind when buying appliances. “Refrigerators are generally the biggest energy hogs because they’re on all the time,” says Sarah Griffith, the strategic communications director for the Consortium for Energy Efficiency, a Boston-based group of utilities, state energy offices, and environmental groups. “But plasma TVs are outpacing refrigerators as energy consumers.” Read “What It Costs to Run a Big-Screen TV” for a comparison of these costs.

Lips urges all of us to take advantage of the programs. “California has kept per-capita energy consumption at the level of the last energy crisis in 1978, mostly via an aggressive program of rebates and credits,” he notes.—Gian Trotta

Essential Information: Find the best places to shop for home appliances. And learn how to keep your current appliances in peak condition.