Submetering: How Does it Save Money, and Is it Worth the Investment?

Submetering building utility usage means measuring water, gas, and electrical usage below the level required for utility billing. This could mean recording usage data for individual buildings within a multi-building complex, individual tenants within an apartment building, individual systems within one building, or even individual devices within one facility.

In a report by the National Science and Technology Council on Submetering of Building Water and Power Usage, it was found that:

“Numerous case studies provide evidence that the ROI [on installing submeters] can be significant…Further, submetering provides the necessary infrastructure for more advanced conservation and efficiency techniques.”

In this report and others, submetering is hailed as the new gold standard for utility metering because of its potential for increasing the sustainability of building operations by reducing waste and cost, changing user behavior in positive ways, and improving operations efficiency.

So, why isn’t everyone rushing to adopt this new resource-saving technology? One barrier to adoption is the fact that submeters themselves don’t do anything to decrease energy use or save money. It’s the data gained through the metering that allows money-saving changes to be made over the long-term. And in the short-term, installing submeters costs money.

Adopting a new technology that needs an initial investment and doesn’t have a direct, immediate return is unattractive to some building owners and managers. However, case studies of early adopters show that long-term savings accrue in multiple ways and quickly displace the installation costs.

How Does Submetering Utility Data Save Money?

The General Services Administration (GSA) released this report on the financial viability of submetering. They reported on recent research measuring savings after submeters were installed in multiple buildings, and found that savings on total utility costs, including bills and infrastructure maintenance, occurred at the following junctures:

  • Installation of Meters: Upon installation of submeters, an average 0-2 percent drop in energy costs was observed. This drop was due to short-term user behavior changes and did not last.
  • Bill Allocation: A 2-5 percent savings was observed when individuals were billed for their use only. When building occupants got direct feedback regarding their usage (when they saw how much they were using and what it cost them), lasting behavior changes resulted and costs decreased.
  • Building Tune-up and Load Management: With improved user awareness, identification of simple operations improvements, and managing demand loads per electric rate schedule, a 5-15 percent savings was observed.
  • Ongoing Commissioning: With ongoing improved awareness, ongoing identification of simple operations and maintenance improvements, and continuing management attention, a savings of 15-45 percent was observed.

These savings are substantial and often lead to rapid return of the initial investment.

Is Submetering worth it’s Life Cycle Cost (LCC)?

Before undertaking a project like submeter installation, calculate the LCC and the predicted return, to determine if it’s a net positive investment. The above-referenced GSA article discusses three measures for performing cost analyses. Cost of installation will vary depending on building size and extensiveness of metering; savings will vary based on your current usage.

Available data on early adopters show that, despite an initial investment and a slight latency before savings are realized, submetering pays for itself and adds value to the building over time.

Early adopter case studies, research, and multiple industry and government reports indicate that submetering is highly cost-effective and brings significant savings in energy and maintenance costs. Speak with an expert to model the financial impact of submetering on your building, and if it’s likely to bring you substantial savings, join the early adopters in implementing this “new gold standard” of utility metering.

Do you have questions or comments, or want to learn more about how to implement submetering in your building or facility for greener and more efficient energy use?Contact us today.

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