Cash for Clunkers Part II: Home Appliances

Giving consumers cash for their old cars when they bought new ones was a wild success. Now the government is turning their attention towards subsidizing purchases of high-efficiency home appliances like refrigerators, washing machines, dishwashers, furnaces, and air-conditioning systems.

Details are still being worked out, but the program is expected to be capped at $300 million taxpayer dollars, and will give consumers $50 to $200 for their old home appliances when they purchase high-efficiency upgrades. Unlike the Cash for Automobile Clunkers, consumers won’t get the discount at the point of sale, but instead will have to apply for a rebate.

While the program is being funded by federal dollars, each state is able to determine which appliances will be on the rebate list. The items will most likely have to be Energy Star rated. State plans will be reviewed by the Department of Energy starting in late October, and money could start flowing to consumers by November.

Just as the government program to stimulate auto demand ran out of money in the first week, this program will likely be exhausted quickly. Still, the program should provide a temporary boost to appliance makers and retailers that have struggled.

Here are a few of our Approved List stocks that could receive a short-term boost in revenue from this new program:

Wal-Mart (WMT) – retailer of appliances
General Electric (GE) – appliances
Ingersoll-Rand (IR) – Trane heating, ventilating, air-conditioning systems
United Technologies (UTX) – Carrier heating and refrigeration equipment
Johnson Controls (JCI) – heating, ventilating, air-conditioning contractors


For those looking to take advantage of some government money (errr…I mean your money) the American Recovery and Reinvestment Act of 2009 extended many consumer energy tax incentives for included a number of tax breaks, which you can see by clicking here. Businesses, utilities, and governments are also eligible for these tax credits.

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Peter J. Lazaroff, Investment Analyst