• by Karl Greenberg , February 26, 2009

The gelid credit and housing markets have frozen the appliance business. About 20% of the major appliance market is driven by new-home construction, leaving about 80% as replacement business. If things were bad in 2007 -- when major appliances fell through the floor--they were worse last year. Now, however, there may be some light on the horizon with a $300 million stimulus package earmarked for consumers who buy Energy-Star certified appliances.

Still, it's a long road back. According to statistics from the Association of Home Appliance Manufacturers (AHAM), sales of the six major categories--washers, dryers, dishwashers, refrigerators, freezers, ranges and ovens--dropped 9.7% last year versus 2007. That might not seem like a tremendous fall if sales had not had corresponding drops that year as well. In 2007, sales of cooking appliances dropped 10%; laundry appliance sales, 6.3%; kitchen cleanup appliances dropped 5.5%; and sales of refrigerators and freezers slid 6.3%.

Jill Notini, VP communications and marketing at the Washington, D.C.-based AHAM, says the Energy Efficient Appliance Rebate Program, a state-administered national program that has just launched, will jump-start the market. The program, which gives consumers rebates for buying "Energy Star" appliances, is the first national appliance rebated program. Energy Star, a 17-year-old joint program of the Department of Energy and the Environmental Protection Agency, identifies products that offer large gains in energy efficiency and pollution reduction.

"This will definitely have an impact on the Energy Star appliances on the market now," she says, adding that at year-end 2008, 55% of appliances--from refrigerators to clothes washers--were Energy Star-certified. She says the program has the potential to lift sales volume, despite the moribund housing market. "We like this program because it immediately spurs consumer spending on efficient appliances, since they get both a rebate and the efficiency savings."

Appliance makers are rolling out their own incentive programs to get people into showrooms. Maytag is offering up to three years of Tide detergent with the purchase of certain laundry appliance washer/dryer pairs.

Asko, a maker of high-efficiency dishwashers, is offering a $100 rebate. KitchenAid is offering consumers who purchase four select KitchenAid brand appliances $300 cash back by mail, $200 for buyers of three select appliances and $100 for those buying two.

Luxury-appliance manufacturer Thermador, a division of Huntington Beach, Calif.-based BSH Home Appliances, is offering free appliances with the purchase of groups of major appliances through July this year.

The "One, Two, Free" promotion, touting savings up to $4,600, offers a free dishwasher with purchase a 36-inch or 48-inch Professional Series range or a 36-inch cooktop and combination ovens. It also offers a free ventilation system with purchase of an additional 36-inch, three-door bottom freezer.

Notini says AHAM plans a separate marketing campaign around the Energy-Efficient Appliance Rebate program for Energy Star-certified appliances, which has to be apportioned to states, by September 2010. "But what we are doing right now is working with the DOE to encourage them to get that funding out ASAP."

The Energy Star site, www.EnergyStar.gov, has launched a new "rebate locator" and shows advertisements by some of the states that have rebate programs in place, such as California, which is running a "Flex Your Power" campaign (www.FYPower.org.).