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
More: Terms & Conditions based on install date
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, which can only terminated by:
- the customer buying out the unit according to the applicable buyout schedule
- Enercare or its authorized service provider determines that the useful life of the Water Heater has ended. The useful life has ended when having regard to the relevant factors, including without limitation, the age of the Water Heater and the cost of any repairs to be made to the Water Heater, that it is no longer commercially reasonable to repair the Water Heater.
Put simply, the contract dies with the unit. If the water heater is no longer functional, such as if the motherboard were to malfunction, and is deemed irreparable by Enercare, then the contract is terminated and you DO NOT have to accept a replacement water heater from Enercare (doing so will create a new contract). Instead, you are free to install your own.
Example buyout schedule
Regulatory actions against Enercare and associated companies
2019 – Competition Bureau discontinues its investigation
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.
2015 – Direct Energy pays $1 million penalty
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.
2014 – Competition Bureau gets Enercare to commit to avoiding anti-competitive practices
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
2004 – Direct Energy fined for sales agents forging contracts
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.
2002 – Direct Energy prohibited from anti-competitive practices for 10 years
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.
Total money grab
I purchased my house in 2017. In 2021, I was advised by my house insurance that the water tank (rental) had expired and I was at risk of losing coverage if it wasn’t replaced. I reached out to a contractor to have it replaced as I did not want a rental. Only to be advised that they were refused acceptance of the tank as there was a buyout from the previous owner. In speaking with Enercare, I was advised that they would send me a copy of the contract. I was never told there was a fee. Instead I receive an email with a blank form that was completed by previous owner and that I would have to pay $50 to get a copy. Why should I assume an expense from a previous contract for a piece of equipment that has expired and be expected to pay an additional cost for proof that I owe this money? Not happy!
sending sympathy to other distressed Enercare victims !
I never had Enercare in my house at all – just because I had Service Experts in once the same year Enercare bought that company they presumed I had a contract with them . I’d already had a different company check my furnace and my hot water tank belongs to Reliance (who only charge me once every 3 months). I even sent them a photo of that tank !
The last Legal investigation into Enercare was in 2019. It is time for another
group investigation for those since then.
I went to BMO’s Investment specialist , who finally reach “Nicholas” who listened to her, and arranged that I send my LAST cheque by registered mail that day, noting on the cheque that completed all contact with Enercare –
I just received a bill, which said I owed nothing . Do I trust them ? NO !
I regret now sending over $100 to try to get rid of them – Good luck !
Very poor and frustrating customer service
Accountants overcharged me last year – they promised to reimburse this amount but it still did not happened. Besides they constantly call my phone with nobody on the other side of the call! Very poor and frustrating customer service. At the same time electricians and plumbers that came for service are very good, honest and hardworking. No complain. Too bad that they have so bad phone-call and accounting workers.
Horrible customer service and billing department
This company is awful! They set up to accounts for the same thing under one address and have been double billing us and then tells me that we have to pay for their mistakes after I spent $9000 to buy everything out. Billing team has no idea what’s going on and spent countless hours hearing something different from everyone. Total scam and awful customer service
Coverage not honoured
I have had plumbing protection for many years. When I called this morning for a repair, the operator offered an up grade. Told me that if I bundled my heating with plumbing and added AC, I would get a $5 savings per month plus no fee for next 3 months. I accepted the offer. Plumber shows up and tells me I have no plumbing coverage. I call Enercare back and the operator tells me that because I signed up for a new plan, I have to wait 30 days for coverage to kick. If I had declined the offer, I would have had the coverage still in place. Do not accept any upgrades they offer over the phone. These operators do not know what they are doing.
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!
I have never received such shockingly irresponsible service in my life. After renting a tank for 16 years, when it did finally break I got no service. The repair person who came to my house said the new tank they brought would not fit. I had to beg them to empty the broken tank. They did not turn off the pressure valve or help in any way. And then began the long saga (which is still not over) of trying to get the tank removed and my account cancelled. I have been without hot water for over 1 1/2 weeks. I have spent hours on the phone, taking up my break time at work. This is without a doubt a bottom-of-the barrel customer service experience. Stressful, careless, unhelpful, irresponsible.
Agree with other comments – a disaster when they took over Roy Inch’s maintenance services. You’ll be on hold for hour(s) waiting for these guys to even answer. Each appliance has to be serviced on different days. RUN, don’t walk to another service provider!
Worst service ever – -basically NO service. Waiting on hold with no results for a regular maintenace appointment. They just don’t have any available appointments etween now and 2023. How is that possible – -why take ion customers if you can’t provide the service??? My inital provider soldor was bought by enercare resulting in the worst possible experience ever. Still waiting to hear form them about what they said they would do. Please avoid at all costs!
The 2 installers who came to our house to install a new furnace cut the cable to our roof antenna. Left without telling us. Who does that??? This happened September 2021. Have been calling them since – promises of reimbursement but not one cent! Horrendous customer service.