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Managing Supply Chain Key for Hawaii Appliance Rebate Program

August 24, 2010 - 10:00am

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Hawaii's appliance rebate program delivered 4,300 rebates to Hawaiians in just three days.  And on just the first day of program, almost 4,000 ENERGY STAR qualified refrigerators were sold.

Funded by $1.2 million from the American Recovery and Reinvestment Act, the program delivered a proportionate number of $250 ENERGY STAR refrigerator rebates to six of Hawaii's islands: Oahu, Hawaii, Maui, Kauai, Lanai, and Molokai.

"It takes a lot of help from manufacturers, distributors, retailers, hauling company, recyclers, advertisers, printers, new reporters, radio stations and television station to create a success story," said Derrick Sonoda, director of operations at Hawaii Energy, which administrated the funding.

"You also can't sell what you don't have and you won't sell without consumer demand and awareness. When we released these rebates, we wanted to be ready, but to be ready we needed statewide teamwork."

Preparing to sell thousands of new appliances

A rebate program of this magnitude required a lot of planning on Hawaii's part. Getting thousands of appliances to the remote island chain can be tricky, as shipments often go from manufacturing sites to the continental United States, then off to Hawaii.

Sonoda says it can take an addition few weeks to get appliances from their landing place in Hawaii to another island. Hawaii Energy worked with manufacturers and distributors in anticipation of the funding coming to Hawaii and was able to overcome challenges and get refrigerators to the islands with the distribution partners.

"We wanted to reach everybody in Hawaii, even the smaller islands, and give everyone the opportunity to participate," he said.

In order to keep the supply chain intact, Sonoda said the utility made sure there were enough refrigerators on the island to distribute.

In addition to readying the appliances, Sonoda said the utility worked to generate excitement in communities through radio, television and print advertisements.

As a result, the appliances sold fast. In addition to saving money and stimulating the Hawaiian economy, Sonoda said programs like this help foster bonds between Hawaiians.

"When there is a program like this, we can see a direct involvement that stimulates and connects businesses together. It helps being neighboring islands together," he said.

Impacting on the islands

On Kauai, one Hawaii's five islands with about 60,000 residents, the majority of the rebates were distributed within the first three days. Kauai Island Utility Cooperative (KIUC) was responsible for administering the rebates for the island. Kauai received $100,000 in funding, plus a $5,000 contribution from KIUC.

KIUC issued 385 rebates to their island residents within two weeks. For an island with high energy rates—35 cents per kWh—these savings can add up, says Claurino Bueno, residential energy services specialist at KIUC. In addition to this rebate program, KIUC also offers Kauai residents a $50 rebate program annually for energy efficient refrigerator purchases.

"The high cost of energy is a huge drive to participate in the program," said Bueno. "Refrigerators can consume up to 20 percent of the total monthly energy consumption of a typical Kauai household.   By taking advantage of these rebates and purchasing energy efficient refrigerators, they can potentially reduce their refrigerator consumption by half or more."

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