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.
After having my gas meter changed by a company hired by Enbridge, the technician wrote up 3 safety violations. I contacted Enercare (who I normally use for maintenance) to fix the issues. Had to call them 3+ times to get a call back for an appointment (each call 30+ minutes on the phone). When they showed up (in an Enercare truck), they told me it would cost $900 and if I did not pay them immediately they were leaving (I wanted to pay Enercare). They only spent 1 1/2 hours and made up a bunch of costs so it would add up to $900 including charging me for 2 hours @ $149.99/hour when they were only there for 1 1/2 hours. Complained to 2 supervisors at Enercare and they did absolutely nothing. What a scam.
We’ve been a customer since 2008, inherited when we purchased the home. Our hot water heater stopped working this July 2022, and after numerous calls, no-shows for appts, 3 awesome repair guys came and just replaced the water heater (they were the only helpful ones in this entire company). We didn’t request a new water heater. They just said on the phone ours was old and replaced it. I didn’t care at the time, as a mom of 3 kids we just need hot water and we were renting an old one obviously. Next came the issues: they created a BRAND NEW account after this. Without warning or notice. I continued to pay my previous account I had for the last 14 years . . . then they called in September saying I had an outstanding balance on my new account which I didn’t know existed. They were able to see the credit on my previous account, and said they would apply it to my new account. They also, during that 1+hour phone conversation, took down my move date in November. Fast forward to this week I received a new bill with a bigger outstanding balance. They have not applied the credit to the account they closed that I had for 14 years. My name was wrong on this new bill (this was the first bill I received of this new account, when they called about “late payments” in September I had not even received any paperwork!). Today, I waited on hold for more than 30 mins to call and correct the credit AGAIN, which was already done 3 weeks ago. When I finally spoke to someone in another country she kept placing me on hold for 5 mins each time. For example, I told her my name and also address was wrong on my bill. To correct that? “Let me place you on hold for 5-10mins”. I asked what the hell was going on when she started asking the most bizarre questions when I had to AGAIN tell them my closing date for the sale of my home in November. Like she asked personal information about the new buyers such as cell phone numbers and their lawyer. I said that information is absolutely NOT shared on the sale of homes in Ontario, Canada. I gave their names. She said there would be a penalty for breaking my contract. What contract? This is insane! I’ve been a customer since 2008! I think this is why they suddenly closed my old account without warning and then opened a brand new one. How is any of this legal? Where can we file charges? Scanning through the reviews I’m worried this is a huge scam company. Super awesome to know nothing will be done and they will shut down and reopen under a new name. Reading business practices the last 20 years is scary under this company.
If one star was only an option!
Please be aware! A rental hot water tank is a full scam. You are actually not renting the tank. It’s a shame that most consumers don’t realize if and when you want to return your rental, the only option is to buy it out. That is not a rental! I can’t believe the consumer protection act lets this firm get away with this practice. Good luck trying to speak to anyone with any sort of authority. This entire company is a sales and marketing machine that practice is all about getting ongoing revenue from renting you a tank that you can’t return. Don’t get sucked in.
Worst Customer Service
After I called Enarcare for 3 weeks and sent them multiple emails to get water heater rental contract, i got it from Sara Eskander(Customer Relations Manager) through email. The contract was a blank term and condition page. My address was missing from that contract. I don’t think they have any kind of signed contract from my previous owner. To cancel the water heated rental Encare is asking for more than 1050$ that to 6 year old water heater. The new one for the same is 1600$ from home depot. As per them, there is no option for termination only one option to buy out but they don’t have any contract for my property with them. Just unbelievably bad service!! Professional SCAM!!
Worst Customer Service
Customer Service is beyond incompetent. I have been overpaying on my monthly bill for the last three months as I am being charged for services that I did not sign on for. I have had to call every month for the last three months and they have not made things right yet. I will likely not see my money back. STAY AWAY AT ALL COSTS.
Their communication is really bad. Whenever I expect a call back it does not come nor do e-mails. As much as telecom customer service gets a bad rap, at least they try to make things right (take some % off of your next bill etc.) Cannot say the same thing about these guys. 3 months and nothing to show for it.
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