Most homeowners don’t spend a lot of time thinking about their hot water tanks. The forgotten appliances just sit quietly and work for years, without any maintenance. So when door-to-door salespeople showed up across Ontario, telling homeowners they were there to replace the tank because it was unsafe or not energy efficient or that their utility company was out of business, it came as quite a surprise.

In Ontario it’s common practice to rent the hot water tank from the local utilities. In recent years, several companies have been working to grab market share, sometimes using less-than-honest tactics. The Ministry of Consumer Services says it received an increase in complaints in recent years, mostly about unclear or misleading contracts.

Direct Energy and Reliance Home Comfort, two of the largest suppliers of rental hot water tanks, both launched advertising campaigns to warn consumers about unscrupulous door-to-door salespeople. They say that there are many tricks these companies use, including:

• Dressing like technicians and saying they are taking part in a neighbourhood tank replacement program;

• Implying they represent the utility or some government agency;

• Telling you that your tank is no longer safe or is not up to current code requirements and that it must be replaced;

• Showing photos of water heaters cut in half with corrosion inside, implying that your tank is in the same condition.

Once the tanks are installed, consumers may be left with expensive cancellation fees and long-term commitments. If you sell your home before the rental agreement term is up, you may be required to get the buyer to assume the contract or pay it out.

If you do agree to switch, the company will want to install the new tank within 10 days. That’s because Ontario has a 10-day “cooling off” period that allows you to cancel your contract if the work hasn’t been performed yet.

Most houses in Canada have storage tank water heaters. As hot water is drawn from the top of the tank when you need it, cold water comes in the bottom and is heated. The tanks can be heated by gas, electricity or oil.

Newer, more energy efficient tanks have features that can save you money, such as electronic ignition, which eliminates the need for a pilot light in gas models. Natural Resources Canada says other features that improve efficiency include extra tank insulation for better heat retention and less heat loss through the walls of the tank, and a better heat exchanger. Gas-fired models have powered exhaust, improved control of the flue baffle and flue damper to reduce heat loss through the vent, and condensing heat exchangers.

If you have an older tank, it’s worth your while to consider upgrading to a more energy efficient model. But there are some other ways to improve your existing tank:

• Insulate the water pipes leading away from the tank.

• Wrap your electric tank in an insulating blanket. For gas-fired units, this job should be left to a professional because if the blanket is installed incorrectly, it could slip and create a health hazard.

• Lower the temperature of the water heater to 60 C. Consult your water heater manual to see how to turn it down. If you are planning to be away for three or more days, turn the thermostat down to its lowest temperature or turn it off. Water temperature should not be any lower than 55 C to avoid the risk of developing harmful bacteria in the tank.

Tankless or on-demand hot water tanks have also become popular in recent years. These tanks heat the water only as you need it, rather than making your pay to keep the water heated constantly. They can be up to 30 per cent cheaper to run than conventional storage units.

However, some smaller tankless units can’t supply enough water for simultaneous uses in a home, such as running the dishwasher at the same time as someone is taking a shower. Whether a tankless heater is right for you depends on your water usage. Direct Energy also says that in areas where water quality rates as hard, tankless heaters are not recommended because they are more susceptible to water scaling than conventional heaters.

Less common types of hot water tanks that provide high energy efficiency include integrated space/water heating systems, which use a single boiler for heating the home and the hot water; and solar hot water systems. Some grants and rebates may be available if you are interested in exploring solar hot water products. For more information and a list of local certified solar installers, visit the Canadian Solar Industries Association website.

Published: June 8, 2010

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Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He has been writing about Canadian real estate, home building and renovation issues for more than 30 years. You can contact Jim at .