Over the past decade, submetering has exploded in popularity. Although the concept is over 100 years old, recent advances in technology, coupled with a push toward green energy, have brought it to the forefront. But what is submetering, and why should you use it?


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What is electrical submetering, and how does it differ from electrical metering?

Electrical metering measures the amount of energy used by a property. A utility company will install a meter on a building or home, then read the meter to determine what to charge on a bill. That may be effective enough for the average homeowner, but it gets more complicated when a property has more than one unit. If there's only one meter, how does a landlord know what to charge tenants? How does an industrial facilities manager make sure their equipment is efficient?

The solution is to submeter. In a submetering system, the utility meter will function as the main or master meter for a property, by measuring the total electricity used. The property manager installs additional meters (submeters) along the circuit that measure individual units under the master. For example, a master meter would tell you how much electricity an apartment building uses, while a submeter would tell you the use of one apartment. So why is this important?


1. Accurate and Easy Billing

In some areas, utilities will directly meter and bill each unit in a property. If the utility doesn't do this, it falls on a property manager to figure out how to bill tenants. Without knowing how much electricity each unit consumes, the property manager will bill an estimate, typically based on the unit's square footage.

The problem is that different tenants have different energy needs. Unless you know who uses what, someone is going to pay more than they should, while someone else will pay less.

Instead, using revenue-grade submeters will allow landlords to bill each tenant accurately by measuring how much actual electricity they use.

Utility billing can also be time-consuming for property managers who already have a lot on their plates. Integrating submeters with a smart metering system through Advanced Metering Infrastructure (AMI) makes this easy. With AMI, meters can be read remotely and sent to a user-friendly web or app-based interface where the customer can take control of their data.

2. More Data for Measurable Changes

You can't make measurable changes if you don't have measurements. Combined with AMI, submetering becomes a powerful tool for collecting data.

For example, a customer's electricity use changes throughout the day. If the customer is doing a lot of energy-intensive tasks at once, their energy demand will be higher during that period. If the peak of their demand is higher than what the utility company rates the property for, it becomes more expensive to provide, and a demand charge will be added to the bill.

Having access to demand and time-of-use data allows the customer to see what periods have the highest demand and make adjustments around them. In this way, a warehouse or factory manager can avoid driving up their peak demand by staggering start-up and running times for different pieces of equipment.

3. Reduce Energy and Cut Costs

In industrial facilities, submetering helps segment departments to allocate costs. Energy data can help each department audit its processes to make them more efficient.

In property management, just being able to see how much electricity they use, makes tenants more energy conscious. It's common to see energy consumption drop 15-30% after introducing submetering.

Lowering energy demand can start a positive feedback loop in savings. If, for example, tenants take measures for more efficient heating and cooling, the HVAC systems don't have to work as hard. Putting less strain on equipment extends its lifespan, preventing the need for costly repairs.

4. Fast ROI

Equipment, installation, implementation, and software aren't free. So when will you see a return on your investment? Getting data in real-time means changes can be made in real-time. Since many energy reductions can be made quickly, so you may see results sooner than you'd expect. The typical property sees an ROI for a submetering project in less than a year. Some may break even within as soon as a couple of months. With automated submetering systems, you may see some additional returns from lowering administrative overhead.

Landlords who previously factored utility charges into rent can see higher net profits by billing energy separately, even when lowering the rent to compensate.

5. Keep Tenants Happy - The Human Return on Investment

Compared to an electricity bill based on an estimate, submetering offers more transparency to tenants. That means tenants don't have to worry about getting a raw deal. Since real-use data empowers them to make smarter decisions and be rewarded by the outcomes, there is less cause of dispute with landlords.

Keeping utility charges separate from rent can be beneficial too. Rental rates are more stable when they're not affected by fluctuations in the price of electricity. That way, if the price goes up, the landlord doesn't have to risk irritating their tenants by raising the rent.

Satisfied tenants are less likely to move, meaning better relationships and lower rental turnover.

6. Increase the Value of Your Property Assets

Whether starting new construction or updating a building that's been around for decades, energy efficiency falls high on the list of priorities.

Submetering sets the foundation for energy efficiency by showing where energy is lost and where it can be saved. High energy efficiency can attract interest from prospective tenants, buyers, and investors who want to ensure their money isn't wasted.

You can prove your effectiveness through programs like the Department of Energy's Energy Star and the U.S. Green Building Council's LEED (Leadership in Energy and Environmental Design) certification.

7. Protect the Environment

The true purpose of certifications like Energy Star and LEED is to protect the environment.

Using data to make smarter energy choices is a great way to promote environmental sustainability. Lower consumption means that fewer pollutants enter the air and waterways from burning fossil fuels.

While the consumption of one property may seem negligible in the grand scheme, the ability to measure and limit that energy footprint will become increasingly important as nations globally pursue aggressive environmental initiatives.

Submeters also play an integral role in renewable energy projects, like solar generation. In a grid-tied solar array, excess electricity is sent back to the power grid. A bi-directional submeter, that can measure energy flowing to and from the solar farm, makes it possible to calculate how much the utility should credit back to the property.

8. Quickly Diagnose Problems

When something goes awry, submetering can help solve the problem quickly. Having access to data in real-time through an AMI system allows an operator to identify the issue, fix it, and check the results within 24 hours, instead of discovering an unexpected expense at the end of a monthly billing cycle.

That can be handy to find out if something is running overnight when it's supposed to be off. Setting alarms can also notify the operator for more immediate action.

9. Reveal Long-term Problems and Prepare for Future

Sometimes problems aren't immediately noticeable. If equipment is slowly deteriorating, you may not be able to tell the difference in how it's running from one day to the next.

It may be easier to notice a trend in energy data over an extended period. This kind of data can help identify maintenance issues before it's too late, allowing you to prepare for repairs, budget time and money, and find the best solutions to your problems.

10. Benchmark and Compare

When optimizing a building's energy efficiency, it's useful to know how similar facilities perform, as comparing like properties can bring irregularities to light.

For example, a management firm runs two nearly identical apartment buildings in one complex. If they notice the laundry room in one consistently uses more energy than the other, they can make efforts to improve what they may not have seen otherwise.

Benchmarking software expands the scope to see how comparable properties within a region stack up against each other. Industry data helps property managers know when they're ahead of the competition and warns them if they fall behind.


In short, submeters let you see what's happening with your electricity. The granular data they provide offers a tremendous advantage when finding solutions for your energy problems. Without a suitable submetering system, you could be left in the dark.

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