Sub-metering is nothing new, but the benefits continue to increase as more building owners and managers opt to switch to this user-pay system. Since the technology was first introduced in 2000, sub-metering has been installed in more than 2,000 residential buildings throughout Canada. Both residents and landlords are realizing the financial implications of their utility consumption, resulting in reduced usage. To get the latest update on this technology and how it is reshaping the multifamily space, we spoke with Peter Mills, Co-CEO of Wyse Meter Solutions.
What are the proven financial benefits of sub-metering?
Across Canada, sub-metering creates enduring value and provides a hedge against future utility cost increases and rent cap erosion. For owners and managers, studies have shown that sub-metering increases their net operating income by approximately $600 per suite, per year. Billed rental suites reduce energy consumption by up-to-48 percent, as compared to non-billed suites. Landlords report that residents billed for one utility will reduce usage across all utilities. There is no other energy management technology or service—deployable to a multi-unit building—that can generate greater savings.
What are the proven environmental benefits of sub-metering?
The environmental advantages of sub-metering are as significant as the financial savings and operational efficiencies. Our billing analysis indicates that each time a non-bill-payer is replaced with a bill-payer, monthly consumption drops by about 150 kWh per suite, on average. This consumption reduction is the equivalent savings of 1.25 metric tons of carbon dioxide put into the environment. It equals 32 trees grown for 10 years, for one suite. In Ontario alone, there are still about 750,000 rental residential suites yet to be sub-metered, representing a substantial opportunity to continue our industry’s world-changing contributions to greenhouse gas reductions.
What are the main challenges and restrictions?
There are some concerns from owners and managers in weaker rental markets that a building may not be as competitive, from a marketing perspective, with electricity and other utilities paid separately. However, most markets now have increased penetration of sub-metered buildings, reducing this concern. Certain provinces, such as Manitoba and Quebec, have restrictive regulatory environments that do not allow sub-metering to be easily implemented. Adaptable solutions are being developed for those jurisdictions. As well, landlords are under pressure to evaluate the various options available from sub-metering providers and ultimately ensure their residents receive the best possible billing and customer service. Despite the challenges, the delivery of sub-metering is increasing at a very rapid rate in most provinces across the country.
How has technology advanced the way sub-meters are used?
We are dedicated to continuous innovation. New, compact water sub-meters equipped with Wi-Fi enabled communication devices are allowing for much more economical metering. The advancements in new, compact multi-customer metering systems are facilitating the completion of comprehensive projects, previously deemed economically unfeasible. European based Thermal or BTU metering is gaining traction in new construction and existing rental properties. Forward-thinking sub-metering providers are offering full integration between the sub-metering billing platform and the property management software, thereby automating new resident enrolment. In addition, some providers have advanced web portals for both residents and property management teams – delivering sophisticated amounts of information in easy-to-use, simplified formats.
What can we look forward to down the road?
The sub-metering of in-suite heating and cooling loads is a new, expanding area. It is being driven by the development of less expensive technology to retrofit in-suite heating and cooling systems. In parallel, we are also enhancing abilities to retrofit existing high-rise buildings to meter water consumption. Owners and managers will increasingly seek out broader services including resident billing for ancillary costs like waste, insurance and taxes. This allows owners to focus on their core business of controlling costs. A key growth area is utility benchmarking and expense management for bulk bill payments. It will become commonplace for holistic sub-metering providers to efficiently handle and process utility expenses for clients, as well as deliver robust reporting and analysis tools. As for residents, they will have access to more innovative tools and mobile apps to control their in-suite energy usage.
There are a couple serious concerns that your article did not address. First, the “restrictive” jurisdictions may actually just be trying to ensure accuracy. In California, an owner of a master-metered property cannot go to sub-metering unless she uses a sub-metering firm that is approved by the Public Utilities Commission. This ensures that they are using accurate meter calibrated regularly, and are not charging tenants more than the owner pays the utility company.
Secondly, applying sub-metering to affordable housing without first ensuring that the building meets a reasonable level of efficiency, is fundamentally unfair to low-income households. If their bills decline after switching to sub-metering, it MIGHT be due to better behavior, but in a poorly insulated, leaky apartment building, a reduction in energy use is more likely because they simply cannot afford an adequate amount of heat (or cooling). In other words, without energy efficiency upgrades, switching to sub-metering may simply be increasing a financial burden on households who are already over-burdened.