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.
Installation of new furnace and ac unit.
The technicians Mike P and Jordan were very professional. They were polite and cordial, and had no problem with me asking questions . They also did an amazing job cleaning up. They are a credit to their profession.
Unsafe work installation of furnace and AC
I had intercare come to my house to do an install of a furnace an air conditioning unit air conditioning unit at that time I had asked to have my water on demand system inspected because it was making odd sounds and it did not have an inspection tag on it so I was concerned so forth it’s been 4 months later my installation of furnan installation of furnace and air conditioning has still not been completed it is now getting cold out my house was at 53ﾟ Yesterday
No Show, Non Professionalism, No customer service effective support, Intimidating Technican
Moved out but they keep calling and charging me for the heat water tank 6 months after the move date. I called multiple times, the landlord also called multiple times. Nothing gets done
Water tank Installers left gas leaking and 4 other violations
Installed water heater and left quickly while gas filled up the house as I slept few hours. Went to work. Next day, ENBRIDGE sent emergency guy to disconnect at meter while I waited on hold to be told that Enercare will come tomorrow. After arguing they sent someone to fix 4 leaks on installed gas line (no soap test was done as req’d) ventilation pipe facing upwards and no booklet left upon install. Proper safety checks were also not done. ENBRIDGE rep said this happens with ENERCARE often
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