In addition to fairly allocating energy costs, commercial submetering is crucial for any sustainable energy management initiative, a central condition for many government-sponsored conservation programs, and required by legislation in an increasing number of jurisdictions in North America.
Submetering Tenants to Reduce Costs and Increase Satisfaction
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 charges based on actual energy use is one of the most effective ways to reduce consumption.
Perhaps the most exhaustive study of applying electrical submetering to multi-unit buildings was undertaken by the U.S. Department of Energy as part of the Federal Energy Management Program (FEMP) in 2007. This study showed that merely installing meters resulted in a 2% reduction in energy use through the Hawthorne Effect. [1]
But that was just the start. FEMP found that submetering as part of a coherent, continuous commissioning program of benchmarking, analysis, and remediation can result in 15% to 45% savings. [2]
To realize this benefit, electrical usage information is needed at the tenant level. This can only be achieved through the granular measurement of electricity through submeters.
Tenant submetering allows building owners to lower operating expenses by transferring electricity costs to tenants, reduce overall energy use, and increase tenant satisfaction as tenants who manage their energy use are no longer subsidizing those that don’t.
Submetering for Energy Management
Mr. Harrington had it right; measurement is the key to improvement [3] — and nowhere does that ring more true than managing a building's energy. How can you tell if your energy management practices are effective or if essential building infrastructure equipment is operating inefficiently without accurate, granular information?
You can't.
The only way to know is by measuring energy use at the device level. And the only way to do that is with submeters.Submeters provide data on load consumption over time. They are invaluable for identifying equipment problems, managing peak energy use, and identifying performance improvement areas.
Government Regulations and Incentive Programs
There is a growing wave of regulation throughout North America focused on the metering of electrical consumption. One after another, cities and states are establishing directives to reduce energy use and have tenants pay for the electricity they use.
In some jurisdictions (such as New York and California), the laws regarding the submetering of commercial properties are detailed and precise. In other areas, standards are not yet in place or are just emerging, so the path is less clearly defined.
What is well defined, however, are the benefits of electrical submetering for building owners, tenants, and the environment alike. That's why the American Society of Heating, Refrigeration and Air-Conditioning Engineers’ standard for energy-efficient design (ASHRAE 90.1) is gaining so much traction.
Since its original publication, ASHRAE 90.1 has become a benchmark for building energy codes in the United States and fundamental for codes and standards worldwide. It is frequently used as a baseline for energy incentive programs and an essential guide for engineers and other building professionals.
ASHRAE 90.1 requires building owners and facility managers to identify how energy is used by tracking and analyzing energy management efforts using submeters. If your jurisdiction has not yet adopted ASHRAE-based standards, it's a safe bet that they will in time. For that reason, as you invest in your building and develop plans for the future, assume all commercial tenant spaces will need to be submetered at some point.
Should You Invest in Electrical Submetering?
The argument for submetering your commercial properties is a compelling one. Beyond the likelihood of future jurisdictional regulations requiring electrical submeters for commercial buildings, adding submeters to your building's infrastructure makes good economic and ecological sense.
Submeters are the only way to gain the detailed level of energy consumption needed to bill tenants, reduce energy costs, and monitor energy management initiatives. Submeters provide the data necessary for participating in energy management incentive programs and offer corporations a pathway to increase their environmental, social, and governance (ESG) standards.
And lastly, submeters hold tenants accountable for the energy they use, offering a fair user-pay environment that is attractive to tenants and increases a building's profitability.
