Time to replace home appliances?
By Kamil Skawinsky • Bankrate.com

When's the best time to buy an appliance? If you think you should wait until yours breaks, think again. As you indefinitely put off a decision, you're likely paying much higher utility bills because of the inefficiency of your old appliances.

The Energy Policy Act signed into law in 2005 by the president provides tax credits to manufacturers of energy-efficient dishwashers, washing machines and refrigerators that meet the latest efficiency standards. In order to encourage consumers to buy energy efficient appliances, many manufacturers pass along the savings in the form of rebates and sales tax exemptions.

Homeowners can also earn tax credits for making qualified energy-efficient improvements to their homes before Jan. 1, 2008. Buying metal roofs, exterior doors and insulation systems can earn you a tax credit of 10 percent of the improvement's cost, or up to $500. Install a solar panel, solar water heating system or fuel cell system and you can get a tax credit of 30 percent, or $2,000 maximum. Regardless, consumers will benefit when purchasing high-efficiency appliances by paying lower utility bills.

Not broke? Consider replacing it
According to the U.S. Department of Energy, Americans spend more than $160 billion annually to heat, cool, light and live in their homes. A sizable portion of this total amount is squandered by old, inefficient household appliances and outdated lighting technologies. This needless waste of electrical energy not only consumes billions of dollars from already strained family budgets, but also contributes to power plant emissions that create soot, smog, acid rain and greenhouse gases.

The typical American family uses approximately 11,852 kilowatt-hours of electricity each year, according to the U.S. Energy Information Administration. At 9.85 cents per kwh, this translates to around $1,167 a year on electricity (a higher amount in certain regions of the country that rely more on electricity than alternative fuel sources). Updating select energy-intensive appliances with the latest generation, most efficient, models could trim up to $150 a year from utility bills.

"When you're in the market for a new appliance or other household electronic equipment, you should really look for Energy Star-qualified products, because these can be as much as 10 percent to 50 percent more efficient than conventional counterparts," says Sara Van de Grift, Energy Star Products program manager for Focus On Energy, Wisconsin's energy efficiency and renewable energy initiative. The Energy Star logo is awarded to products that meet or exceed established criteria for energy efficiency by the Environmental Protection Agency and the Department of Energy. "Many current models qualify for the Energy Star label, which really speaks volumes to the success of the program," says Van de Grift.

Most consumers tend to shop for a replacement only when their old appliance fails. The thought of disposing of a perfectly working older model air conditioner, refrigerator or washing machine seems counterintuitive and unnecessarily wasteful.