A new national program to subsidize energy-saving home appliances will benefit consumers and companies, while expanding domestic demand and boosting energy conservation, experts said Thursday.

The State Council announced Wednesday that it would earmark 26.5 billion yuan ($4.2 billion) to subsidize the consumption of energy-saving home appliances for a one-year period, after an executive meeting presided over by Premier Wen Jiabao.

The appliances include air conditioners, flat-panel television sets, refrigerators and water heaters that meet energy-saving standards.

The program will stimulate upstream production and downstream recycling, and will noticeably boost domestic demand, Zhao Ping, a research director with the Chinese Academy of International Trade and Economic Cooperation, told the Global Times Thursday.

Zhao said the subsidy would allow consumers to get 5 to 10 percent off when purchasing these energy-saving home appliances. This is likely to boost sales by 200-250 billion yuan, Zhao noted.

As the old-for-new subsidy and energy-saving subsidy expired in 2011 and the rural home appliance subsidy will come to an end in January next year, the new program offers a timely boost for the home appliance sector, given that sales have dropped significantly this year, said Liu Buchen, an expert at Zhengzhou-based home appliance consulting firm

Jiachunqiu Media Institute.

Sales of home appliances dropped 10.1 percent year-on-year in the first quarter of 2012 to 263.1 billion yuan, according to Beijing-based consulting firm China Market Monitor Co.

Liu said previous predictions were that consumption of home appliances would see slight or even negative growth in 2012. But with the new subsidy the prospects are more optimistic, Liu said, and there could be as much as 10 percent growth in 2012.

"As the program is targeted at energy efficient products, it will help firms with higher energy-saving technologies get stronger," Liu noted.

It will also enhance domestic firms' global competitiveness, given that many Chinese companies have struggled so far to meet the requirements for energy efficiency of home appliance imports announced by the EU in 2009. 

Furthermore, the program will reduce national power consumption and help relieve energy shortages, Liu noted. 

When the program will start has not yet been announced, but Liu predicted that more details would be released in June or July.

Another 2.2 billion yuan will be allocated to promote energy-saving lamps, 6 billion yuan for vehicles with engine sizes below 1.6 liters, and 1.6 billion yuan for electrical machinery, the statement said.