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.
Cancelling Service is a nightmare
I have been trying to cancel a service due to the sale of the property, for 3.5 months! They can’t seem to stop sending us bills and have yet to set up the new owner. They even tried to send to collections against us!! How hard is it to do? No other company has an issue with canceling or setting up a new account. If there was a zero for the rating I would give them one.
Senior Citizen Scam
Signed my mom up for the gas fireplace cleaning plan. They took a working gas fireplace and when finished told her it needed $2000 in repairs. Called another gas technician who fixed their mistake for the cost of one hour labour. Scam, stay away.
My husband and I signed up to rent a furnace/AC from Roy inch and sons in London, ON because we had worked with them before. They were the best company we’ve ever dealt with however Enercare bought them out. We weren’t contacted when they took over, even though Enercare assured us that notices were sent out. We had a flood on our basement and it took enercare 3-4 days to return my call, they were supposed to replace a part after the flood and 3.5 months have gone by with no part. I’ve never dealt with a worst company, they don’t have good customer service people, I receive mixed information about everything I’ve asked. I would not recommend this company to anyone! If we would have known that the we weren’t going to be working with Roy inch and sons we would have purchased our furnace/Ac outright.
I give them 1 star because there is no option to give none
Terrible! . They promise same day service but in my case had to wait till next day to get a technician to check the tankless water heater. The equipment was damaged and had to be replaced completely. They said someone was going to call me to schedule the replacement but never did. I had to spent 3 hours in total dealing with them and decided to cancel the contract as they couldnt commit to install the new equipment within a specific timeframe. No guarantees and in the meantime imagine days or weeks without hot water. After cancelling without penalty, of course as the equipment had to be replaced, they continued charging me for a couple of months. In addition, I had to pay $75 for the removal of the equipment, and call numerous times to ask them to remove the automatic billing and refund the amounts charged in excess.
Terrible Customer Service
I contacted Enercare’s customer support team to obtain a copy of my service contract and buyout terms for my water heater. I am in the middle of selling my house, and the buyer has requested the contract as a condition of sale.
I was promised a copy of the contract and a buyout quote within 48hrs. It seemed strange that this information would not be kept on hand, but as it’s just a call center taking customer service requests, I accepted this and waited for the 48hrs.
Fast forward one week later – I have contacted Enercare customer service eight times now, spending a collective 10hrs waiting on hold. Each time I called I was given different information. One customer service rep told me it would be 24hrs. Another said 15 days! The last one I spoke to said the reason I haven’t received a copy of my contract is because I did not agree to a $50 admin fee for providing the contract, which is laughable, considering they were the first representative to introduce this fee. I agreed, but alas, still no contract in my e-mail.
Today I finally recieved a document from Enercare, but it is a blank contract template with no mention of my account, name or address.
At this point, this issue is holding up the sale of my home and has become quite stressful. I have even driven to an Enercare warehouse to see if I could talk to an employee face-to-face. Unfortunately, the brick and mortar locations only house technicians, who were very kind, but still could only provide me with the standard customer service number I’ve been calling.
I’m at a loss of what to do.
Stay away from this company at all costs. They will never forget to bill you, but leave you out to dry when it matters most.
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