If you're in the area, you're welcome to join us for breakfast and a kitchen design class every second saturday of the month. Bring some photos and a professional can help you with design ideas. Here is a link with more info on the class: http://www.leichtny.com/how-much-will-your-kitchen-cost-class-registration Let us know if you have any questions.

Usually when you get side panels you automatically have space on the sides. If you have a full depth cabinet on the top, you automatically have space at the top and in most cases you will have leave at least 1 inch of extra room for the back of the refrigerator, so there is always air circulation since everything is enclosed. In the 70's they use to make a small recessed space behind like Fred said, today you don't have to do that, most Ref have flat backs, recessed wiring, not to mention the supply for ice-maker also comes in a flush mounting kits for the wall... so pretty much everything is recessed and only space you need is for air circulation and 1" is more then enough. In addition, if you make recessed area now and you push ref to far you will never get your doors open so doing all that is a waste of time, in addition most manufacturers starting to make 30" side panels.

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Sujithra, Please try to evaluate if your current refrigerator would be good enough for you for next 5 years. If yes, then 1-2 inches gap either side shall be fine. But if you foresee any likely change in near future for a bigger refrigerator it will be better if you plan for it now. I think your designer is making a provision for your future needs which IMHO is a good thing. Thanks Amit, Cornerstone Designs, Bangalore.