In the First Month of the High-Efficiency Appliance Rebate Policy, 13% of Funds Used... Manufacturer Sales Up 122% YoY

Ministry of Industry Announces First Month Results of Top Efficiency Appliance Purchase Rebate Program
9 Months from March 23 to Year-End... Early Termination Possible Within 8 Months if Trend Continues
Budget Halved from 300 Billion to 150 Billion Won in National Assembly, but First Month Shows Smooth Start

[Asia Economy Reporter Moon Chaeseok] The Ministry of Trade, Industry and Energy announced that it has used up 13% of the total budget within the first month of implementing the '2020 Top Efficiency Home Appliance Purchase Cost Rebate Program.' This program offers a government rebate of 10% of the purchase price, up to 300,000 KRW per individual, for buying energy-efficient home appliances. It was launched to revive consumer sentiment, which had worsened due to the novel coronavirus disease (COVID-19).

On the 26th, the Ministry reported that from the program's launch on the 23rd of last month until the 22nd of this month, a total of 176,258 rebate applications were received. The requested rebate amount totaled 19.7 billion KRW, which is about 13% of the total budget of 150 billion KRW. Based on the purchase receipts submitted with the rebate applications, the total purchase amount for eligible products was 203 billion KRW.

Although the Ministry initially submitted an additional budget proposal of 300 billion KRW to the National Assembly to stimulate domestic demand and extend the program period until the end of this year, the budget was halved to 150 billion KRW. Nevertheless, the program had a relatively smooth start in its first month. If this trend continues, the budget is expected to be exhausted around November, eight months after the program's launch, which aligns with the Ministry's goal of using up the funds within nine months.

According to the National Assembly Budget Office, this program has significantly expanded compared to similar programs conducted in 2016 and last year in terms of duration, eligible product categories, budget, and rebate limits. The program duration increased from 3 months (2016) and 2 months (last year) to over 6 months (or until funds are depleted). Eligible product categories expanded from 5 to 7 to 10 items, including washing machines and vacuum cleaners. The budget surged from 100 billion KRW to 30 billion KRW to 150 billion KRW, and the rebate limit increased from 200,000 KRW to 200,000 KRW to 300,000 KRW.

With the program's scale expanded, its impact has also grown. The Korea Energy Agency surveyed the performance of home appliance manufacturers such as Samsung Electronics, LG Electronics, Winia Dimchae, Winia Daewoo, Cuckoo Electronics, Cuchen, and Otek Carrier, finding that sales of rebate-eligible home appliances increased by 122% compared to the same period last year.

Among the 10 eligible product categories, the number of applications was highest for electric rice cookers (23.5%), washing machines (23.3%), refrigerators (13.9%), kimchi refrigerators (12.9%), and TVs (11.6%). In terms of rebate amounts requested, washing machines accounted for 26.1%, refrigerators 23.3%, and kimchi refrigerators 20.2%.

The energy-saving effect is also expected to be significant. The Energy Agency estimates that the high-efficiency home appliances distributed over the past month will save approximately 6,900 MWh of energy annually. This is equivalent to the annual electricity consumption of about 1,850 households (based on four persons per household).

The Ministry plans to continue this program until the end of this year but may end it early if the 150 billion KRW budget is fully used. If early depletion of funds is anticipated, advance notice will be provided through the Top Efficiency website. For inquiries about eligible products, rebate applications, or other questions, users can visit the Top Efficiency website or contact the customer center.

An official from the Ministry emphasized, "We hope this program will contribute to revitalizing domestic consumption, which has been depressed due to COVID-19, and serve as a catalyst for quickly overcoming the difficulties facing our economy."

This content was produced with the assistance of AI translation services.