Metering vs Submetering: Key Differences Explained

Metering and submetering are not quite the same thing, though they are related concepts. In metering, a single master meter measures the total utility consumption of a whole building or property, whereas in submetering, individual submeters measure consumption for specific units or zones. When thinking about metering vs submetering, it’s a question of use case and application rather than utility type, as both are used across all utility types (water, electricity, gas, and thermal).

Today, metering is a widespread and mainstream approach for utilities of all types. As operational needs change, technological advancements position submetering as an effective tool for managing utility costs and resources. In this article, we’ll discuss the key differences between metering and submetering, and when submetering is an effective tool.

What is Metering? 

Utility metering is the measurement of total utility consumption for an entire building or property and is typically performed through a utility-owned, managed, and installed master meter.  The landlord doesn’t need to address any disruptions; the utility company handles them. Metering applies across utility types, including water, gas, electric, and thermal (heating).

Where a property has only a master meter, utility bills are calculated based on consumption as recorded by the master meter. Where individual utility meters are not available, property owners may use methods such as Ratio Utility Billing Systems (RUBS). These methods allocate utility costs using formulas rather than tracked and monitored usage. Such methods can simplify billing but often result in higher recovery of utility costs, leaving property owners burdened with additional utility expenses. 

What is Submetering? 

Submetering is the practice of installing individual meters within a property or building to measure unit-level utilities consumption across all utility types (water, gas, electric, thermal). Submeters are typically owned by the property owner rather than the utility, meaning that property owners are responsible for their installation and maintenance.

Submetering enables measuring utility consumption for specific sections or entities within a larger property, such as individual apartments in a multifamily building, specific departments in a commercial building, or individual pieces of equipment in an industrial facility.

Submetering isn’t simply an additional method for measuring utility consumption; it’s a strategic investment designed for multifamily property owners, building administrators, owners, and landlords that provides multiple tangible advantages in the dynamic real estate market.

The Environmental Protection Agency’s WaterSense program supports metering and submetering because these approaches allow property managers to identify areas for targeted reductions, find leaks and malfunctioning equipment, track savings from efficiency projects, and integrate usage data into management systems. A similar rationale applies to other utility types as well. Various studies have found that submetering promotes conservation behavior among residents, such as the National Apartment Association and National Multi Housing Council’s landmark Submetering, RUBS, and Water Conservation research paper. 

Detailed insights into utility consumption data and patterns within a property enable precise cost allocation among residents or departments, allowing a shift away from RUBS allocation methods towards individualized, consumption-based billing.

Key Differences Between Metering and Submetering

While both metering and submetering measure utility consumption, they differ in purpose, ownership model, placement, and billing. Metering measures total building or property consumption for utilities, whereas submetering measures utility consumption for individual units of a property or building for owners, managers, and operators.

Here is a comparison table covering the core differences between metering and submetering:

Category	Metering	Submetering
Ownership	Utility-owned master meter	Owner-owned submeters
Location	Where the utility enters the building	Individual units, zones, systems, or equipment
Measures	Total property utility consumption	Specific, individual unit/area/zone consumption
Number per property	Typically one	As many as necessary to cover each unit
Billing method	Utility bills owners, who portion costs to tenants through flat rates or RUBS	Usage-based billing based on actual consumption
Data granularity	Building-level	Individual unit, area, or system-level
Maintenance responsibility	Utility	Property owner/manager

One of the most important differences between metering and submetering is the granularity of the generated data. Submetering enables precise tracking of a given utility across an entire property or portfolio, allowing property owners and managers to collect comprehensive consumption data for each unit. 

This enables usage-based billing, which is more transparent than RUBS and provides better utility cost recovery. The Study of Submetering in HUD-Funded Housing found that submetering shifts utility consumption patterns and billing structures, enabling owners to recover a greater share of utility costs through tenant billing. In contrast, while master metering is a simpler approach, it does not provide such granular data, and billing is far less transparent. Industry-reported cost recovery ranges for RUBS billing systems typically range from 70-85%, whereas 85-95% are considered typical for submetering.  

Master Meter vs Submeter

A submeter always works alongside a master meter. The master meter in a submetered property is still responsible for measuring property-level consumption. Submeters operate downstream from the master meter to track unit-level consumption.

Here’s a quick comparison table to cover the differences between a master meter and a submeter:

Feature	Master Meter	Submeter
Ownership	Utility	Property owner
Location	Where utility enters the building	Unit, zone, tenant space
Measures	Total building consumption	Individual consumption
Read by	Utility company	Property owner/manager or submetering provider
Maintained by	Utility company	Property owner
Purpose	Utility billing	Cost allocation and analytics

Smart Meter vs Smart Submeter

Smart meters and smart submeters are often confused with one another, but they do serve different purposes, even if the devices used are the same. Smart meters are typically installed by the utility to measure overall building or property-level utility consumption and feed their data back to the utility. Smart submeters are installed by property owners and managers to measure individual units within a multi-use property, such as an apartment building, and feed the data back to the property’s own data management platform.

Category	Smart Meter	Smart Submeter
Installed by	Utility	Property owner
Primary purpose	Utility billing and grid/infrastructure management	Unit-level monitoring, analytics, and billing
Data recipient	Utility	Property management platform
End user	Utility and customer	Property owner, manager, tenant
Scope	Whole building/property	Individual units/zones

A typical use case in smart metering. In smart water metering, the utility will install a smart water meter as the building’s master meter. The meter will collect detailed consumption data for the property and transfer it to the utility for billing and infrastructure management.

Considering smart water submetering next, the property owner can install smart water submeters at the point where water enters each unit in the property. The data collected by the submeters is then sent to a management platform for analysis. This platform, owned by the property owner or manager, provides detailed analytics and data to support maintenance budget allocations, conservation programs, and fair, transparent tenant billing. Although these examples discuss water, the same principle applies across all utility types.

Billing in Metering and Submetering

Master Meter Billing is based on the total consumption recorded by the master utility meter. The utility provider bills the property owner directly for the total consumption, and cost allocation between residents is up to the property owner. Billing methods may include flat-rate billing, where tenants pay a fixed amount regardless of their individual usage, or ratio utility billing, where costs are divided among tenants according to industry-standard assumptions. This approach is simpler, but it can result in inefficient cost allocations for owners. 

Submetering Billing is based on the actual consumption recorded by the submeters in specific locations for each entity within the property. Property owners can directly bill tenants for their specific utility usage, leading to more accurate billing. Submetering billing offers transparency and encourages conservation by making tenants personally accountable for their costs. 

Master metering provides simplified billing but cannot produce accurate, transparent unit-level bills like submetering can.

Here is a worked example showing the potential difference between a metered and submetered property. In this example, we’ll consider only the water utility, but it’s illustrative more broadly. The National Multiple Family Submetering and Allocation Billing Program Study suggests that residents in submetered multifamily units use approximately 15% less water than residents in unmetered units. Using this conservative estimate, we can calculate the difference between a hypothetical master-metered and a submetered property.

All dollar values are illustrative examples for the purpose of explanation. Actual costs and savings are dependent on specific utility tariffs, infrastructure costs, and deployment scenarios.

Master meter only:

• Building size: 100 apartments
• Water consumption: 500,000 gallons per month
• Water cost: $10 per 1000 gallons
• Monthly utility cost: $5,000

In this scenario, the utility bills the property owner based on the total consumption recorded by the master meter. The property owner must then allocate those costs to residents using a method such as RUBS or a flat-rate billing model. For example, under a simple equal allocation, each apartment would be charged $50 per month, regardless of its actual water consumption.

Submetered:

In submetered apartments, reductions of 15% in water consumption are reasonable, according to various studies. In this case, a 15% reduction represents 75,000 gallons per month.

• Building size: 100 apartments
• Water consumption: 425,000  gallons per month
• Water cost: $10 per 1000 gallons
• Monthly utility cost: $4,250

This represents an estimated monthly utility cost reduction of $750 due to lower water consumption. In addition, because each apartment’s consumption is measured individually, utility charges can be based on actual usage rather than estimated allocation methods. For example, an apartment that consumes 3,500 gallons would be charged $35, while another that consumes 5,000 gallons would be charged $50. This provides a fairer and more transparent billing process while encouraging water conservation.

Metering vs Submetering By Utility Type

The adoption and implementation of metering vs submetering differ depending on the specific type of utility considered. In some cases, submetering is standard; in others, it’s rare. Public agency guidance and federal building standards consistently describe electricity and water submetering as the most widely implemented applications, while thermal and gas are more situational. 

Here, we’ll consider how metering vs submetering works across utility types.

Electricity

The National Science and Technology Council Submetering of Building Energy and Water Usage report notes electricity metering as an established practice in commercial and residential buildings. Typical applications include office buildings, retail centers, mixed-use developments, and industrial settings where cost allocation, operational efficiency, and energy management are core concerns. Smart energy meters are a common feature in many developments and support tenant billing, equipment monitoring, and unit-level tracking. 

Gas

Gas submetering follows the same principles as other types of submetering, but comes with additional safety and installation considerations. The infrastructure requirements mean that gas submetering is less common than electricity or water submetering, as existing pipe layouts can be challenging to retrofit. The infrastructure complexity and safety concerns mean that this type of submetering is mostly found in commercial or industrial settings, where the added complexity and cost are outweighed by regulatory or operational pressures. 

Water

Water submetering is a fast-growing submetering use case due to rising water costs and changing regulatory pressures. It’s growing especially quickly in multifamily properties and mobile home parks, with adoption driven by an increasing need to recover utility costs, conserve water, and accurately track consumption. Typical applications include multifamily apartments, condominiums, student housing, mobile home parks, and mixed-use developments.

Thermal/Heat

Thermal or heat submetering is a unique case because consumption is often generated centrally and distributed throughout a building. Thermal systems include district heating and cooling, central boilers, chilled water systems, steam systems, and hydronic heating systems. In Europe, thermal submetering is common in district heating networks, while in North America, it’s common in large multifamily developments, campuses, and district energy systems. Thermal submetering is most valuable in properties that distribute centrally generated heating or cooling to multiple occupants.

When to Use Metering orvs Submetering?

The decision to rely solely on metering or to implement submetering depends on a variety of factors, including property type and size, existing infrastructure, regulatory requirements, financial goals, and tenant expectations. 

Here is a quick guide showing when it’s appropriate to consider submetering:

Property Type	Single-tenant buildings generally will not require submetering, as master metering is sufficient. However, multi-tenant or unit buildings typically benefit from submetering, which improves fairness, visibility into consumption, and cost allocation.
Property Size	Larger buildings often offer greater opportunities for cost recovery and operational insights than smaller ones, making submetering a more effective choice.
Existing Infrastructure	Existing infrastructure can significantly affect whether submetering is feasible. Where the existing cabling, plumbing, or other infrastructure is complex or difficult to access, submetering can be equally difficult to implement.
Regulatory Environment	Some states, local authorities, and regional authorities mandate submetering in various scenarios, such as in new constructions or certain types of housing. Where this is the case, submetering is a necessity.
Financial Objectives	Upfront costs of implementing submetering need to be weighed against investment cost recovery after implementation, improvements to NOI, and reduced utility expense burden as tenants become responsible for their own utility costs.
Tenant Expectations	Usage-based billing is generally more transparent and fairer than allocation methods, as tenant bills are generated directly from their consumption. In this context, submetering is an effective tool for managing tenant expectations.

Next, we’ll consider three different scenarios: a 100-unit apartment building, a single-tenant warehouse, and a mixed-use commercial property.

100-Unit Apartment Building

A 100-unit apartment building is an extremely strong candidate for submetering. With 100 separate units, submetering enables significant visibility into utility consumption across the property, enabling better data-driven, strategic decision-making. Additionally, in this scenario, a submetered property would enable property owners to fairly allocate direct and actual utility costs to tenants, resulting in far better utility cost recovery and lower utility expenses compared with a master meter-only scenario.

Mixed-Use Commercial Property

A mixed-use commercial property is typically a good candidate for submetering because submetering can separate tenant and common-area usage. Because there are multiple tenants with potentially diverse utility needs, allocating resources can be difficult under a master-meter-only scenario. With submetering, each tenant’s utility consumption can be tracked, and costs can be allocated much more fairly. 

Why is it Important to Submeter? 

Modern submetering solutions leverage advanced technologies such as smart meters, high-end data management platforms, multiple network options (LoRaWAN, NB-IoT, wM-bus or other, Mioty), and sophisticated sensors to deliver robust, comprehensive data and advanced functionality, alongside the financial and environmental benefits of submetering. With end-to-end submetering solutions, property owners can enjoy the many benefits of submetering, including:

• Financial stability: Accurate utility tracking enables precise, per-unit billing for tenants, helping to recover utility costs and reduce owner utility expenses on an ongoing basis
• Regulatory compliance: Submetering providers can ensure all equipment complies with relevant state and local codes and operates according to all relevant legal frameworks, simplifying deployment
• Increased property value: Submetering systems can make properties more attractive to buyers, investors, and tenants, enhancing property value
• Advanced analytics: Advanced submetering systems provide comprehensive analytics and data monitoring capabilities. Smart meters and data management platforms allow owners to track usage patterns over time, identify anomalies such as leaks in water submetering, and prioritize maintenance where it’s needed most. Data management platforms can generate reports, export data, check historical information, send notifications, and integrate with third parties to make more strategic choices
• Fair billing: Individualized billing based on actual utility consumption allows for fair, transparent billing of tenants, enabling property owners to pass utility costs to those generating them
• Sustainability: Submetering encourages conservation behavior by making tenants directly accountable for their own consumption, leading to both long-term savings and environmental benefits

Frequently Asked Questions

What is the main difference between a master meter and a submeter?

Master meter measure total building utility consumption and are installed where utilities enter the building. Submeters measure individual unit-level utility consumption and are installed where utilities enter a specific unit.

Can you have submetering without a master meter?

Generally, no. Submeters operate downstream from a utility billing meter and operate in addition to, not instead of, the master meter.

Does submetering work differently for water vs electricity vs gas?

Submetering across all utility types follows the same principles, but there are specific installation and infrastructure considerations depending on the utility in question.

Is submetering required by law?

Submetering regulations differ significantly by jurisdiction and utility type. Some authorities mandate utility submetering for certain types of development, while others have no requirements. As submetering regulation is highly regional in nature, it’s always best to check with the relevant state, regional, or local authorities.

Conclusion 

The core difference between metering and submetering is that metering measures total utility consumption at the building level, whereas submetering measures consumption at the individual unit level. Both metering and submetering can be applied across all utility types. 

Submetering offers multiple benefits to property owners, including more granular data for better utility visibility, usage-based billing that can enable more effective utility cost recovery and allocation, and numerous operational benefits, such as more targeted maintenance and better analytics. Submetering can incentivize greater personal accountability in tenants, supporting diverse energy or water conservation goals, while at the same time making billing fairer and more transparent. 

Whether metering or submetering is the right choice depends on property type, existing infrastructure, financial or business goals, and regulatory requirements, but in many cases, submetering is an effective tool for a wide range of property owners.  

For further insights into meter data management platform or how smart ultrasonic meters operate, explore our blog articles.