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NORTHAMPTON - The state's much-touted appliance rebate program came crashing down Thursday morning, as residents eager to take advantage of a significant savings opportunity swamped a special website and telephone number.

Thanks to more than a million calls in two hours, the website was inoperable and the phone line busy, frustrating hundreds of residents across the state and flooding appliance store employees with complaints.

"This is a tremendous screwup ... This is a crazy way to try to give consumer rebates to upgrade their appliances," said Max Hartshorne, of South Deerfield.

The program, set up to encourage shoppers to exchange their old appliances for new, energy-efficient models, was scheduled to begin at 10 a.m., but the website was rejecting people and the phone was busy a short time later.

In response to the confusion, the state's Executive Office of Energy and Environmental Affairs released a new website for consumers, www.maswap1.com. But shortly after noon, all $5.4 million in rebates had been claimed and a waiting list had formed for $2 million worth if buyers drop out.

By early Thursday afternoon, the DOER office announced the program's closure on its website.

The announcement said that more than 26,000 rebate reservations were made in 2.5 hours, and that Massachusetts households tapped the funds faster than any other state so far. An additional 11,000 appliances have been reserved through the waiting list.

Some on the waiting list still have a chance to get an appliance. People who reserved a rebate must buy their appliances from qualified Massachusetts dealers by May 5 and return their rebate forms by June 19, or lose the option.

"The unprecedented interest in the program generated more than a million calls in two hours," the statement said. "At any one time there were as many as 3,000 people making reservations online."

Thousands of others like Hartshorne were not able to participate. Hartshorne said he had been preparing for the last two weeks to buy a new washer-dryer, and had shopped around to get the best quotes. He tried to get onto the site Wednesday night and Thursday morning, and called the phone number at least 100 times.

"I'm one of the many who didn't get it," he said. "Every time I tried it would be busy."

Hartshorne, an editor for website developer GoNOMAD.com, said the state knew it would get hundreds of thousands of hits and should have been better prepared.

The DOER addressed such complaints in its statement.

"DOER regrets how difficult it was for many to participate, apologizes for the inconvenience, and will investigate the process further," the statement said.

The state did warn households in advance of the program's launch that funding would be limited, and rebates would be issued on a first-come, first-served basis. After that, a limited number of wait-listed applications would be taken, but with no guarantee that any funds will become available to fulfill them.

The appliance rebate program, timed to coincide with the 40th anniversary of Earth Day, is designed to encourage people to ditch old energy-wasting washers and dryers, refrigerators and freezers with highly efficient new ones. It is being paid for by federal stimulus dollars. The state received $6.6 million to administer the program.

The rebates are significant, including $250 for a dishwasher, $200 for a refrigerator, $175 for a washing machine and $50 for a freezer. Many manufacturers and retailers were also offering add-on rebates of their own, dramatically lowering product costs.

The state estimates that 27,000 old appliances will be traded in as a result of the program, resulting in energy savings of 2.6 million kilowatt hours annually. The savings is the annual equivalent of eliminating 4.3 million pounds of carbon dioxide, or enough energy to power 340 households for one year, according to a press release last fall.

The program's success has some lawmakers arguing for a return to a summer sales tax holiday or different form of stimulus program.

"It is certainly a shame that there wasn't even close to enough money to satisfy the demand," said Sen. Steve Baddour, a Democrat who represents the border community of Methuen. Many residents in such areas are especially sensitive to price and incentives, since they have the option of easily shopping in tax-free New Hampshire.

Jon Hurst, president of the Retailers Association of Massachusetts, said: "This has been a great promotion, investing ... back into our local economy. Now we ask the governor and Legislature to deliver to Massachusetts consumers a sixth sales tax holiday this August."

Hurst estimated such a holiday - during which the state's 6.25 percent sales tax would be waived for many goods - could generate $500 million in retail sales in one weekend.

Information from the Associated Press was used in this article. Chad Cain can be reached at ccain@gazettenet.com.