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Submetering Savings for Multi-Unit Rental Buildings

Type of Building:
Multi-unit residential building

Installing a submetering system

Est. $16.50 / month

Energy Savings (Entire Building):
Est. 15% / month for electricity and 30-50% / month for water.

The Challenge for Landlords and Property Managers:
Landlords and property managers want to lower energy costs for their multi-unit residential buildings. In addition, they want to move the responsibility of energy use, fluctuating energy rates, and costs to each tenant.

Installing a complete submetering system in the multi-unit residential building.

Benefits for Tenants:
Instead of paying an equal portion (usually included in rent) of the entire building’s energy usage, tenants only pay for what they use. Typically, the low-energy users subsidize heavier users in the building. Instead, submetering gives tenants more control over their consumption and cost. Often, it is an incentive to be mindful of energy consumption which can reduce the building’s consumption overall.

Benefits for Landlords and Property Managers: 
Studies have shown that when tenants are responsible for paying for their own energy use and receive more accurate utility bills, they reduce consumption. In fact, data shows that with submetering:

  • Buildings can save an average of 15 percent on electricity usage.
  • Buildings can save up to 30 to 50 percent in water usage.

Submetering eliminates the risk of changing energy prices negatively affecting the building’s net monthly income.  Users are responsible for the cost when energy rates increase or decrease. 

For example, if an unexpected rate increase causes a $30,000 increase in the building’s monthly utility cost, submetering would pass that expense on to users. Otherwise, the tenant’s rent might not cover the utility cost increase without submetering.

Estimated Cost:
If the meter surcharge is $10.50/month for the meters, plus a read-and-bill service fee, the total additional cost might be $16.50/month.

Landlords and property managers can accurately distribute utility costs and responsibilities to tenants at a minimal cost. With submetering, each user is responsible for their own energy usage. Offering incentives for energy conservation and lower rates through energy contracts could attract future tenants and boost tenant retention.

In addition, submetering will lower the building’s energy consumption and utility costs overall (up to 15% for electricity and 30-50% for water). It also protects landlords and property managers from fluctuating energy rates, ensuring the cost is always covered.

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