Commercial Submetering: How Much Could You Save, Really?

According to the US Government EnergyStar program, "energy use is the single largest operating expense in commercial office buildings, representing approximately one-third of typical operating budgets ." [1]

With most of that expense coming in the form of electricity, it's no wonder property managers and building owners are looking for ways to reduce electricity consumption and increase building efficiency.

Why Submeters?

There are several strategies for reducing energy costs, but few are as compelling and fundamental as submetering. Many studies have shown that using submeters to allocate costs based on actual energy use is one of the most effective ways to reduce consumption.

But how much can you save, really?

Perhaps the most exhaustive study of applying electrical submetering to commercial buildings was undertaken by the US Department of Energy as part of the Federal Energy Management Program (FEMP) in 2007. [2] This study showed that simply installing meters resulted in up to a 2% reduction in use through the Hawthorne Effect. [3]

But that was just the start. FEMP found that the use of submetering as part of a coherent, continuous commissioning program of benchmarking, analysis, and remediation can result in 15% to 45%savings. 

They the North

The story is the same north of the 49th Parallel. In 2011, CanmetENERGY, the Canadian leader in clean energy research and technology development, undertook a study as part of an ISO 50001 pilot program — using revenue-grade submetering as the primary source of data. 

The use of continuous commissioning on a building at their complex in Bells Corners, Ontario, Canada, resulted in a 17% reduction of energy over 3 years. As you can imagine, given the nature of the organization performing the study, this building was already a highly functioning one.  Still, the costs avoided on that single building after just 6 months of installing submeters was$18,500. [4]

The Proof is in the Legislation

Source: National Conference of State Legislatures

The Utilities and regulators responsible for our energy supply have been active participants in energy management research for the past 20 years, and are well aware of the effectiveness of submetering. 

Faced with growing energy demands and the expense of increasing generation capacity, they see "negawatts" as a viable alternative. In other words, encouraging conservation of energy use through awareness, incentives, and legislation. Consequently, jurisdictions are regulating the use of submeters in commercial and residential buildings at an increasing rate.

New York State, Maryland, and California have been leaders in mandating the application of submetering. It has also been addressed at the city level by many municipalities, such as Seattle and Austin. (See "SubmeterNation").

In short, submetering is proven to be economically efficient in reducing consumption for property managers, tenants, and the Utilities alike. 

So Why Isn't Everyone Installing Submeters?

When tenants pay directly for energy use, overall building consumption drops by as much as 20 percent, with a majority of tenants experiencing a reduction in their net monthly costs. [5] That's an impressive saving that is comparable to installing an entire building automation system or changing all the windows in an office tower — at a fraction of the cost. Put another way, for every 5 buildings that are submetered, an entirely new building can be powered from the saving alone. With such impressive savings, one has to wonder why everyone isn't installing submeters.

Making a Case for Submetering

A significant obstacle to adoption is that submetering on its own doesn't decrease energy use or save utility costs. It's through the data that the meters deliver and subsequent action taken that savings are realized. In the immediate-term, meters cost money. 

For some property managers and building owners, buying technology that has an initial investment and limited immediate return seems is too risky. But as illustrated above, even in the short-term gains are impressive and a case for the investment easily made.

Having quantifiable savings versus LifeCycle Costs (LCC) is helpful when making your case. In a subsequent article, we'll show you how to get those numbers for your particular situation — commercial, residential, or institutional. 

If you need to make a submetering purchase in the short-term, contact us directly and we'll help you get the information you need.

[1] Commercial Real Estate: An Overview of EnergyUse and Energy Efficiency Opportunities, EnergySTAR

[2] Making the Case for Energy Metering, ASHRAE

[3] Hawthorne Effect: the alteration of behavior due to their awareness of being observed, Wikipedia

[4] Canada’s Leader In Clean Energy Research And Technology Leads Energy Management Charge

[5] Making the Case for Energy Metering, ASHRAE

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