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 $157,500 in 2003 after investigators discovered 25 of their sales agents were forging contracts to trap Ontario and US citizens into long-term energy contracts.
The Competition Tribunal found that Enbridge Services (later known as Direct Energy) was engaging in practices that intentionally suppressed competition and restricted consumer choice, including:
- a requirement to call to obtain authorization to return a rented water heater;
- aggressive retention tactics during these calls;
- restrictions on when and where water heaters can be returned; and
- unwarranted fees and charges.
The consent ordered prohibited similar conduct for a period of 10 years. An investigation found that Direct Energy re-engaged in similar conduct after the consent order expired in February 2012.
Pathetic Customer Service
My furnace is out for 5 days. We have 7 people sick in the house including a 10 month old. With temperature going in single digits at night i have no heating to provide my family. Spoke to 5 agents with average wait time of 40 min the only solution i have to get credited 100$ as compensation.
Enercare does not have an answer to where I stand with the repair work as nobody can track the replacement part necessary for my furnace
Easy to sign up. Awful to leave.
I’ve been on the phone with them multiple times to return their 20 year old water tank we had been renting. They obviously want to waste so much of your time that you give up in frustration. It was the same situation to break a maintenance contract with them: endless waiting, confusing responses, Byzantine processes that benefit only them. Were I to need a maintenance contract in the future, I’d much rather go with a smaller local company that feels they need to earn my business.
Review would be 0 if that option was available
The absolute worst customer service I’ve ever encountered. Customer service reps are trained to ignore the issues and brush you off. Once you ask them for a supervisor or to speak to the planning dept ( the ones that book the tech’s to come to your house)they try to say that the Supervisors are in meetings (all day long and everyday), if you’re actually lucky enough to get thru to a supervisor, they don’t want to hear or even acknowledge when a customer service rep has been rude or when they’ve disconnected you….for the 4th time, they just want to “move forward”, not resolving any frustrations the customer may have encountered to get to the point of asking for that supervisor. Save yourself some serious aggravation, find another company!!!
Bad customer service
I spoke with 3 different people within 45 minutes, no resolution and I am required to call them back to attempt resolution! What company works that way- fairly unhappy 12 yr customer and you let the call go without solving the problem or escalating to a manager?!? If I’d done this when I worked for Rogers/ Bell /Sears as cust. service I would’ve been harshly reprimanded for not meeting expectations, possibly even given a warning for a call like this one (or should it be 3? as each one passed me on with the knowledge that the next agent could certainly assist) Where do they get these people? Or is it farmed out? The technicians have been terrific but customer service is horrific since 2017.
Service man Colin G, very efficient, helpful and friendly.
The Service Man, Colin G., as very efficient, helpful and friendly.
However, the company in itself was not as efficient. The original booking date came and went and after two calls to the office, (one was disconnected and no one phoned back even though they had our number), the 2nd call they said they would call back within an hour and they didn’t. We called the next day, and they made an appointment for the following day. Finely all is done. Not earth shattering and luckily Colin made up for it.
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