Making the Case for Submeters

Study after study shows that submetering results in significant savings for building owners and tenants alike [1]. Still, not everyone has jumped on the submetering bandwagon.

Why Not Submeters?

A significant obstacle to adoption is that submetering on its own doesn't decrease energy use or save money. The benefits of submetering result from the data that the meters deliver — and subsequent action taken.

For some property managers and building owners the immediate investment seems risky, and they are hesitant to make the jump.

Benefits All Round

But they shouldn't be. The benefits of submetering commercial and residential buildings are numerous and well documented — including improved building operations, fair utility cost allocation, enhanced tenant satisfaction, and increased property value.

Improved Building Operations

Property managers save money and increase profits by identifying faulty equipment, limiting peak-time energy use, and recognizing inefficient operational practices. Additionally, real-time feedback combined with building system benchmarking support Energy STAR and other green building initiatives.

Fair Cost Allocation

Utility consumption can be allocated to tenants, giving them insight into their energy use patterns and making them accountable for usage. 

Increased Tenant Satisfaction

Tenants recognize the transparency of submetering and appreciate the insight and control it gives them over their energy management initiatives. Research shows that when tenants pay for their electricity, overall consumption drops 15 to 20 percent — with a majority of tenants experiencing a reduction in their net monthly costs. [2]

Rising Property Value

Lowering overall utility consumption improves the bottom line and increases property value and market competitiveness. Cost allocation protects property managers and building owners from non-budgeted utility expenses — improving their net operating margins.

But It's Mostly About the Dollar$

While all of these are significant advantages in their own right, nothing screams BENEFIT louder than a reduction in overall energy use and the resulting dollars saved.

With submeters installed, tenants and property managers gain greater visibility into operating expenses and utility consumption (electricity, water, thermal, gas). Greater visibility typically results in a change in behavior — with reductions in energy use and overall energy costs soon to follow.

In 2016 Navigant Consulting Inc. analyzed monthly consumption data provided by Enercare Connections for 1,500 non-electrically heated units in 47 multi-residential buildings in Ontario. The goal of the study was to determine the impact of switching from bulk utility metering to submetering.

The findings were significant, concluding that: "a unit (apartment or condominium) converted from bulk to submetering yields annual electricity savings of approximately 40%”. Furthermore, Navigant's testing indicated that this level of savings would persist over time. [3]

Need to go Deeper?

But even armed with these impressive numbers, it's sometimes necessary to go beyond "general benefits" and "expected saving ranges" when proposing capital projects. Sometimes you have to go deeper to get approval.

In their report "Submetering Business Case: How to Calculate Cost-Effective Solutions in the Building Context” [4], the U.S. General Services Administration (USGSA) offers some help. If you need some hard numbers to support your particular submetering initiative, it's worth a read. The article discusses three common approaches to performing a cost analysis of your submetering investment. Details on simple payback period, net present value, and internal rate of return are all discussed — with clear examples of how to calculate each.

Armed with solid numbers and the well-established and impressive list of generally recognized benefits of submetering, you’ll be able to undertake your metering project with confidence.

[1] Commercial Submetering: How Much Could you Save Really?, Triacta Energy Systems

[2] Making the Case for Energy Metering, ASHRAE

[3] Evaluation of the Impact of Sub-Metering on Multi-Residential Electricity Consumption, Navigant Consulting Inc.

[4] Submetering Business Case: How toCalculate Cost-Effective Solutions in the Building Context, USGA