5 Reasons Why Your Property Needs Submetering

 March 29, 2018  11:18 AM

Whether it be a commercial, residential or industrial property that you’re about to build, the market certainly calls for some efficiency savviness on your part. With green energy in high demand on the one hand, and tenants seeking more equitable utility billing on the other, submetering is crucial for the average developer.

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But first, what is submetering?

Traditionally utilities, whether electricity, water, or gas, are recorded by a bulk meter where the property manager is responsible for utility costs. The costs are then billed to building tenants through set rental rates, typically a certain rate per square foot leased.

Submetering is the installation of meters downstream from the main supply of electricity, water or gas, measuring the consumption of individual tenant units and allowing for a fair and transparent billing system based on actual consumption. Common applications monitor electricity usage and data is sent, typically every 15 minutes, to energy management software (sometimes through the building management system) for analysis.

There are a number of practical reasons why submetering works for both the property manager and the tenant, and we are going to break down five of them for you today.

Submetering Appeals to the Shrewd Tenant

The project manager is not the only party on the lease who’s on the look-out for accurate energy readings. Because a submetering system allows you to bill each tenant for their individual measured utility usage, it is viewed by potential tenants as a more transparent and fair approach to leasing within an increasingly competitive market.

Tenants are no longer expected to accept that their utility bill is higher than what they actually consume because their next-door neighbors are not as savings conscious as they are. The traditional approach of sharing the overall cost is simply falling out of date. Additionally, submetering provides the ability to detect utility bill errors by comparing submeter usage with the actual utility bill.

We offer Read, bill, and collection services for tenants’ utility costs on behalf of the property manager.

Cost Savings through Improved Energy Behaviour

Energy efficiency is a natural result of accurate submetering of electricity, water or gas consumption. This is because a submetering system with a good analytical software informs the consumer of their consumption habits in real time and where savings opportunities lie. Such a system would provide information on whether needless energy was spent at night, for example, or when the tenant was actually away from their unit. It has been shown that pay-for-use billing can result in a 34% decrease in total energy consumption. Because each tenant is accountable for their own usage, their incentive to cut back on unnecessary consumption is increased.

A related practice, made easy by submetering, is to take advantage of off-peak utility charges. Often, utility providers set higher charges for what they deem are “peak demand” periods. Submetering offers visibility into such variations, and informs the end user of opportunity slots for energy savings.

More Efficient Equipment Management

Submetering not only measures domestic consumption, but can provide critical insight into how major pieces of equipment in commercial buildings behave. The energy consumption of an HVAC unit, for example, may be individually analysed and optimized. This information can be used by property managers to devise a load shedding solution to minimize power spikes.


Not only that, but submetering offers the option to analyze the consumption behaviour of the same piece of equipment over similar periods of time. This can help identify consumption trends. Similarly, equipment can be analyzed within the same period of time to spot patterns of performance as well as irregularities, such as parasitic loads.

Green Building Benefits of Submetering

A sustainable approach to energy efficiency, such as the one attainable through submetering, is your path to a green building certification. By recording accurate energy efficiency through the submetering system – whether its improved equipment performance, tenant cost savings or even a calculation of reduced carbon footprint from more responsible usage – the property manager or developer is able to use this information to get LEED certified and Energy Star rated. If ever there was a time to join this increasingly popular crowd of pioneering green builders, it’s now.

Read our recent blog post for more information on this up-and-coming trend.

Reap the Benefits of the CSR Trend

In the commercial real estate market, businesses will pay a higher lease for a more sustainable building to publicly promote their commitment to “Corporate Social Responsibility” (CSR). This demand for green energy means that the developer can assign a value to submetering that goes beyond the initial cost of the investment.

Hamdon Submetering offers financing options if you’re worried about the upfront cost of the system. We are here to accommodate you and your building’s needs.

More tenant appeal, cost savings, and green building is simply a call away.