A Guide to Sub-Metering and Submeters

At a time when an increasing number of people are living in houses of multiple occupancy, it is more important than ever that business owners, landlords, tenants, and property managers all understand sub-metering. Simply billing a property for the energy that it uses can cause problems, but sub-metering can solve these. Everybody pays for what they use.

What is Sub-Metering?

Sub-metering allows property owners and managers to fairly distribute utility costs among residents fairly, increasing recovery rates by empowering them to take charge of their usage and separate rent from utilities. It can also be used in commercial properties to measure specific energy usage by different parts of a business. 

There are different types of sub-meters available, tailored for water, gas, and electricity usage. Every building has main meters installed at the point of entry, which capture all of the energy, gas, and water consumed by that building.

Sub-meters are separately installed meters downstream of the main meters that measure the individual consumption of plant and equipment in commercial properties or homes with multiple occupancy.

Reasons for Using and Benefits of Sub-Metering

There are clear benefits to switching over to sub-metering if one is suitable for your property. 

Cost savings

Sub-metering can help multiple-occupancy property owners increase their cash flow by recovering tenant utility expenses. It can also improve cap rates and increase cash flow by reducing utility expenses and increasing property values.

Energy efficiency

Sub-metering can protect property owners from rising energy prices by allowing them to pass on utility expenses to tenants. It also incentivises tenants to conserve energy by making them directly responsible for their own usage and billing.

Accurate billing

Sub-Metering is fair. Everyone pays for what they use and no more, avoiding potential areas of conflict between tenants over energy usage. 

Environmental impact

Sub-metering can have a positive environmental impact. In addition to encouraging people to think more about their energy usage, submeters can also act as an early warning system against damage to infrastructure, allowing for the more specific location of issues. 

Types of Submeters

Submeters vary in what they can measure and how often they measure, as well as their size, type, level of accuracy, communication method, output rate, cost, reliability, and more. They are most commonly used to measure gas, water, or electricity. The type that works best for you will depend on your specific circumstances. 

There are essentially two types of submeters: networked and non-networked or “manual.” Networked meters are connected (wired or wirelessly) to a data collection device, making them smarter and more easily managed. Non-networked meters are, as they sound, not connected to a data hub, so they need to be read manually each month.

Installation Costs and Process

Installation costs will vary according to the specifics of your installation, but £200 per meter is a reasonable starting point for the cost of the equipment and installation. 

Ordinarily, representatives from your energy company will visit your site and conduct an energy audit to determine which parts of your commercial premises could benefit from submetering. This will be done in consultation with your business to understand which areas of the building or parts of the industrial process you wish to optimise. 

Upon agreement on the work required, the supplier will install any new sub-metering equipment and remove any older hardware if needed. Once installation of the recommended sub-metering setup is complete, they will conduct the first phase of data collection to gain an understanding of your energy consumption. After phase one is complete, your energy data is analysed and monitored for any behavioural changes, such as usage patterns not matching up with occupancy patterns. 

Phase two of the process involves reviewing the data collected so far and identifying any energy-intensive areas of the business that may require more granular metering. Upon consultation with the customer, we will re-visit your site and perform any further installation works as required to be read manually each month.

How Sub-Metering Works

Every building has main meters installed at the point of entry, which capture all of the energy, gas and water consumed by that building. Sub-meters are separately installed meters downstream of these main meters that measure the individual consumption of plant and equipment. Sub-meters give a more detailed picture of what makes up the total consumption figure on your energy or water bill or in hourly or half-hourly data that can be downloaded for analysis.

Because of the billing aspect of this, submeter accuracy is critical. It is, therefore, very important to maintain your own checks on these meters and report any anomalies to your supplier. A sudden spike in reported usage on a water meter could mean a leak, and in the case of a gas meter, it could be even more serious. 

Using Submeter Readings to Calculate Bills

On a specific day of the month, take a meter reading. This acts as your starting point. Exactly one calendar month; take another. This is your endpoint. Subtract the first number from the second, and you will have the amount that has been used. 

Water

With water, the amount used will normally be measured in gallons, but do check, since different meters may use different means. If you are certain that all water which passes through the main meter also goes through a Submeter, you can use the figures to calculate proportional use, as a percentage. 

It’s worth noting that if you are certain that ALL water that passes through the main meter also passes through a sub-meter and the difference is greater than normal (about 3%), there is a possibility that there is an issue with one or more water meters. You should investigate what might be causing this. Contact your supplier immediately. 

Gas

Gas sub-meters monitor individual residential units or individual equipment consumption of natural gas, like boilers, commercial kitchens, ovens and furnaces. They are installed on the natural gas lines upstream from the services that will be metered and are usually read via a metering system. Installing a sub-metering system for natural gas or propane in your property will help you understand the details of the gas consumption in your property and assist in reducing your overall utility cost.

A well-designed system should take into consideration the gas volume flow, gas pressure on the line, and pressure drop to ensure the proper meter sizing. Additionally, the selection of the communication from the meter to the Data Collection unit should be considered. When the installation is done, your property will be ready to start the billing process. The remote reading system can read all gas sub-meters automatically, and the company will bill the user individually and collect the payments.

Electricity

Any sub-metering system should be designed as part of an ongoing monitoring program. In other words, it needs to be designed, implemented and maintained as a production-quality building management system that allows future additions at a reasonable cost. As the building or complex expands or your tenant distribution changes, the sub-metering system needs to be flexible enough to adapt to these changes. In addition, operational responsibility needs to be clearly defined and designated to ensure accessibility, availability, and dependability.

Again, planning is key, and professionals best carry out meter installation. By having a professional design and certified contractors perform the installation, you ensure that the sub-meter system meets all the city regulations and safety requirements. Installing electricity sub-meters in your facility is a superb way of capturing usage information to make well-informed decisions about reducing and eliminating waste while simultaneously cutting excessive utility costs. And in an era when energy efficiency is increasingly important, you're doing your bit for the environment!

Multi-Tenant and Multifamily Sub-Metering

Sub-metering homes of multiple occupancy enables property owners to automatically collect consumption data from water, electric, or gas meters and allow tenants to be billed based on their actual consumption. This is rather than using ratio utility billing systems, which divide utility bills equally between units. Not only does submetering encourage conservation, but it is also the fairest way to allocate utility expenses. 

In recent years, a new type of electrical submeter has emerged: multi-circuit meters. These are ideal for retrofitting and upgrading metering solutions for residential, commercial, and industrial applications. They have only one set of inputs for a common voltage source and multiple sets of current inputs for loads that share the common voltage source and will be worth your consideration.

If all of this is starting to naked your eyes glaze over a little, you may wish to consider utilising the services of a utility management company, who could take care of all of this on your behalf. But this, of course, costs money.  

Sub-metering is a powerful tool that can help small property investors manage costs, promote conservation efforts, and maintain compliance with regulations. By installing individual meters to measure the consumption of electricity, gas, or water for each tenant in a building or complex, property owners can accurately allocate utility costs, incentivise tenants to conserve resources, and increase cash flow. Business owners can gain a granular understanding of their energy use and maximise savings. 

Staying updated on submetering trends is essential to maximising its benefits. As technology advances and regulations change, it is important to keep up-to-date with the latest developments in submetering to ensure that your system remains accurate, reliable, and compliant with regulations. Whether you’re considering upgrading your gas, electricity, or water, there’s never been a better time to make that change!