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Buy, Rent or Lease a Storage Tank Water Heater. What is the right decision?

Many utilities across Canada offer customers the option or renting or leasing a water heater, or purchasing one outright. Water heaters can also be purchased at retail outlets, from contractors, distributors, wholesalers or dealers. Storage type water heaters are the most common in Canadian households.

The decision to buy or lease comes down to how prepared you are to make a one-time payment, as opposed to paying small monthly sums. Considering the total accumulated monthly payments over the years, buying outright could be cheaper in the long run.

Renting a Water Heater

Most rental programs offered by utility companies and energy suppliers apply to storage-type water heaters. In some areas, these suppliers are often able to provide affordable and energy-efficient water heaters through mass purchases.

Renting or leasing can be attractive for a number of reasons:

  • It provides peace of mind, since you have access to fast, 24-hour service, 365 days a year.
  • Installation is easy and convenient. There are no fees or delivery charges, the installation will be done by professionals, and removal of the old water heater is part of the job.
  • The equipment is often more energy-efficient. Renting or leasing can give you access to a good quality product that may not be available on the market.
  • No deposit is required, and payment can be made in convenient monthly instalments as part of your utility bill.
  • If you live in an area where the water has a high mineral content, which typically shortens the useful life of the water heater, it may be preferable to rent or lease.

Check with your utility or energy supplier to see whether renting or leasing is an option in your area. In some cases, there may be limits on the type, size and energy efficiency of water heaters available through lease or rental arrangements.

CAUTION: Renting or leasing a water heater involves entering into a long-term agreement with the supplier. These arrangements can involve expensive buy-out options if you decide to switch to a different energy supplier.

Buying a Water Heater

The simplest way to purchase a water heater is directly from a utility. Installation and service are included, and the entire transaction can be financed through monthly payments. If your utility doesn't sell water heaters, you can purchase a system from a contractor or through a retail outlet. Look for a supplier who promotes the quality of the product and good service as opposed to just low prices.

More choice, product designs and sizes are available when buying instead of renting or leasing a water heater. While storage-type water heaters are the most commonly sold and installed types in Canada, a consumer has the option of considering other water-heating systems, such as heat pumps, solar-assisted, tankless or instantaneous water heaters and integrated space-water heating systems, which require specific sizing and installation considerations.

Considering All the Costs

Many new water heaters are relatively inexpensive to purchase and install, but what about the ongoing operating costs? After all, you use hot water in the home every day – often lots of it! In fact, it can cost you seven times as much money to operate a water heater for 10 years as to purchase the system.

So it pays to be an informed consumer. Don't automatically accept the model proposed by your plumber or heating contractor – ask questions. Keep in mind that the cheapest unit to buy could end up costing you money in unnecessarily high energy costs for years to come. On the other hand, a high purchase price on its own doesn't guarantee long-term energy savings. It is the technology that is important.

The same advice applies if you are renting or leasing a water heater. If a rented or leased machine wears out, ask your utility or energy supplier to replace it with an energy-efficient model.

Selecting an energy-efficient model that can reliably meet your needs will not only save you money, it will help the environment because we produce fewer greenhouse gas emissions by using less energy. In making a decision, it's important to know that:

  • there are several different types of water heaters
  • for each fuel option, there are a number of different product types and models to choose from
  • size matters
  • installation options can affect your choice
  • a water heater's energy efficiency will have a big impact on its operating costs

Selecting an energy source for a water heater

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