Renting a water heater, furnace or other home appliance from Enercare is similar to buying an extended warranty as it works as form of insurance. You pay more for the product upfront and get support should anything go wrong. However, it is a great moneymaker for providers and a bad deal for the majority of their customers and renting these appliances is not common practice in Canada outside of Ontario. Purchasing your own unit can result in substantial savings over time, according to the Competition Bureau.
Further reading: Is renting a water heater worth it?
- No large up-front cost
- Low monthly payments
- They handle service and repairs
- High cancellation and buyout fees
- Many complaints about their maintenance and repair services
- No coverage for damage caused by leaking tanks
Enercare installs, rents and services water heaters, furnaces, air conditioners and other HVAC products to 1.9 million customers in Canada and the US.
The company has its roots in the 1950s when the Consumers’ Gas Company of Toronto introduced rental hot water tanks. They worked with home builders to pre-install gas-powered water heaters to increase usage and reliance on natural gas as a source of fuel.
The Ontario Energy Board approved the deregulation of gas in 1992, which meant that consumers could purchase gas from companies other than their utility. IPL Energy acquired Consumers’ Gas in 1993, rebranding it Enbridge Consumers Gas in 1998. UK-based Centrica purchased Direct Energy in 2000 and acquired Enbridge Home Services in 2002. The Consumers’ Waterheater Income Fund (CWIF) was then created to house the water heater rental portfolio – had the highest earnings per employee in Canada for 4 years. The name was changed to EnerCare in 2011.
- Enercare acquired Direct Energy’s Ontario services business in 2014.
- Enercare acquired Service Experts – a chain of HVAC service companies in Ontario, Manitoba and Alberta and 29 US states – in 2016.
- Enercare was acquired by Brookfield Infrastructure in 2018.
Interestingly, for its size and importance, Enercare Inc. does not seem to have its own Wikipedia page.
Who owns Enercare?
Enercare is owned by Brookfield Infrastructure Partners LP, a US-based, publicly traded infrastructure asset management firm and subsidiary of Brookfield Asset Management which manages over $600 million worth of assets. They purchased the company in a friendly takeover for $4.3 billion in 2018.
How much does it cost to rent a water heater from Enercare?
Ontario residents can rent a hot water tank from Enercare (previously Direct Energy) for $20 to $35 per month depending on the size of the tank. Tankless water heater rentals are commonly found in new builds and cost $35 to $50 per month.
In addition, the agreements stipulate that these charges are increased every year by the greater of 3.5% and CPI + 2%.
These rental agreements continue until the “end of the useful life” of the unit, which is from 10 to 20 years and an average of 16 years. At $35 per month, payments made during the agreement would add up to $4200 to $8400 – 3 to 6 times the installation cost of the tank (about $1500).
Further reading: Is renting a water heater worth it?
Enercare contract example
How to cancel an Enercare water heater contract?
If your unit was installed before September 15th, 2010, you can terminate your agreement at any time with no buyout. You have to return it to them (free) or they will disconnect and remove it for you for $75.
Since 2010, Enercare has used a “buyout only, useful life” (BOULC) contract. The only termination option for a BOULC prior to the end of the water heater’s “useful life” (determined solely by Enercare and averages 16 years – ie. failure) is to purchase the unit at a price schedule determined by Enercare when the contract is concluded.
Example buyout schedule
Regulatory actions against Enercare and associated companies
The Bureau announced that it has discontinued its investigation due to “insufficient evidence” However, information gathered in the course of the inquiry indicated that the high required buyout prices, and the duration for which they were required, went substantially beyond the recovery of Enercare’s initial investment. It found that in 2018, Enercare had:
- A market share of approximately 80% in a relevant market that includes rental gas-powered water heaters in the Enbridge Gas Territory.
- The ability to impose consistent price increases above the rate of inflation.
- High internal rates of return
2017 – Competition Bureau launches investigation into Enercare
Following the receipt of numerous customer complaints about Enercare’s water heater return policies, contracting practices, and alleged breaches of the 2014 commitments, the Bureau launched an investigation into whether Enercare Inc. violated the abuse of dominance provisions of the Competition Act.
The Bureau’s investigation determined that Direct Energy re-engaged in similar conduct after the consent order expired in February 2012, administering a $1 million penalty even though Direct Energy had exited the market by selling to Enercare.
Enercare acquired Direct Energy’s portfolio of rental customers in October 2014.
In November, the Bureau got Enercare to commit in writing to:
- Not requiring customers to obtain an authorization number before returning their unit
- Allowing a new supplier to terminate a customer’s account on their behalf
- Not unreasonably restricting where and when a unit can be returned
- Not charging unwarranted fees to switch providers or terminate contracts
- Opening new return depots
Direct Energy was fined $157,500 in 2003 after investigators discovered 25 of their sales agents were forging contracts to trap Ontario and US citizens into long-term energy contracts.
The Competition Tribunal found that Enbridge Services (later known as Direct Energy) was engaging in practices that intentionally suppressed competition and restricted consumer choice, including:
- a requirement to call to obtain authorization to return a rented water heater;
- aggressive retention tactics during these calls;
- restrictions on when and where water heaters can be returned; and
- unwarranted fees and charges.
The consent ordered prohibited similar conduct for a period of 10 years. An investigation found that Direct Energy re-engaged in similar conduct after the consent order expired in February 2012.
Furnace Buyout Scam
My advice to anyone thinking about using this company is DO NOT DO IT. I’ve been trying to get the buyout amount for the furnace since April 28th. I was told it would take 3 business days and they would send a letter. No letter came. My wait time on that call was 42 minutes before being transferred to another department where I waited for another 20 minutes. Now a month later when we have offers on the house I’ve called again same wait same “we’re sorry for the inconvenience” garbage and still no answers. The only reason I’m even dealing with them is they convinced my elderly father (81 at the time and in the early stages of dementia) to replace a perfectly good furnace he owned with this rented furnace. That was 8 years ago and every year the rental amount is increased so “we can provide better customer service”. They are a horrible company, spend your money elsewhere because the headaches to do anything but send them money aren’t worth it.
As I write this I now have the buyout amount – $2500 for an 8 year old furnace with $90 payments over that same time – i.e. $8,640. At the time of the installation the buyout was $3500 so basically every payment reduces the buyout by $10 per month. So in order to sell this house we will have paid 11,140 for a furnace. I’m quite sure that 8 years ago a new furnace did not cost 11,140.
Worst Service of My Life
First and last time I ever dealt with Enercare was when my water heater died and we had no hot water in the dead of winter. Called 8 am on a Friday and was told a technician would be calling me shortly. Nothing happened. Called them FOUR times Saturday and pretty much hourly on Sunday. Same response: a repair person will be calling you shortly.
Out of desperation we rented a hotel room so could have a shower since we had not bathed since Thursday. Our house only has shower stalls so tub baths was not an option.
On Monday morning 8am I call again and the call center person stated they did not know why they had told me someone was coming because Enercare doesn’t service “rural” areas on weekends! I live in a town of 100,000 people! They then stated someone would be calling me soon. I said don’t bother disconnect my service NOW!
I called Reliance and they came within the hour. We had hot water within hours!
Here’s the kicker: that was in early February and it is now May. Enercare are still sending us bills for March and April! And offering to service our furnace. I said you couldn’t fix my hot water in three days in the dead of winter, do you think I will trust you if the heat goes!?
I will never ever have anything to do with that company again! Terrible service and never spent less than 45-90 minutes on hold when calling in.
Confusing reports state one thing but the technician do another and enercare has plausible deniability
On July 10 2021 Enercare was called by the previous owner of the house to fix the air conditioner. A technician comes and fills up the refrigerant.
The technicians notes from that service case are the following;
“Leaking @ service valves. Caps sealed with Nylog and system vacuumed + charged and working correctly. Pressures: Hi-250psi / Lo-115psi. Delta t-22F. Subcooling-10F. Left in good order.”
The report we got from Enercare stated everything was in good order. We had a hold back on the property based on this.
By those notes an average consumer would expect the problem resolved. But it wasn’t. The air conditioner had a leak in the condenser coil not in the valves. We were told by two other Enercare technicians that came out after we took possession of the house that the first technician should have spotted this right off the start. Enercare is claiming that they never stated the issue was fully fixed. Yet their reporting stated or lead us to believe otherwise.
In Feb 2022 Enercare came in to service our furnace. The technician stated the carbon monoxide levels in the furnace exceeded regulation and shut the gas off and put a tag on it. Yet we got a report from Enercare stating that our furnace’s general condition was good, age of the equipment was 7-17 years and Efficiency was high. Yet at the top there is mention of ‘A TAG’.
I find this misleading simply do to the fact that if a tag is put onto the furnace due to carbon monoxide issues therefore the general condition could not be good and the efficiency of the furnace could not be high. Enercare’s reports are either misleading and/or the technician failed to fully disclose and report the issue and/or the reports provide confusing contradictor information.
This seems to go against the principles of the Competition Act and the AODA. Why hasn’t a law firm picked up on this and started a class action against Enercare?
rental water heater replacement
Had to get the rental water heater replaced. Had Steve and Kurt do the job. Had no problem with this crew. They did a great job, cleaned up after all was done. I would say one thing is the office told me the crew would be there between 10:00 AM and 2:00 PM on the day we picked but that someone would call me and give me 30 min notice before they come over. I only got 10 min notice before they came over to do the job. But this minor thing is the only thing that i can say bad about this whole job. So i would still give them 5 stars because i would not hold this minor thing against the great job they did on the install of the water tank.
Liars if I could give zero stars I would, the format won’t let me
They told me I was buying my water heater. 9 years later it turns out that in spite of 37$ p/month I have paid less than 200$ into the heater. Their rental agreement is you have to buy out the heater upon cancellation which is a clear statement that you have some kind of buy into it. This should be illegal. the sales person lied to me and told me I would own it after a few years.
Leave a review or submit a complaint
If you have experience with Enercare, we’re interested to know your thoughts. How long have you been with them and what do you think about their service, contracts and value? Let us know by leaving a review and sharing your experience below!