Each suite in this building has its own circuit supplying electricity for in-suite lighting and appliance use.
There is only one electrical meter for the entire facility. With a single meter, it is impossible to know exactly where the electricity is going, so there is no way to charge tenants fairly for their usage. Although all tenants ultimately pay more when energy is wasted, there is currently no economic incentive for an individual tenant to reduce his/her own electrical consumption.
We recommend installing utility grade submeters on each suite, connected to a central system and managed by a specialist contractor, to allow for accurate monitoring and tenant billing. There is a body of research showing that accurate metering and cost recovery in a multifamily building can reduce suite electrical use by as much as 30%.
Frugal tenants will no longer be subsidizing
There are vendors who will install suite submetering systems at no capital cost to the owner.
Issues and Concerns
Although the Owner does not have to pay for system installation, he doesn't get an immediate economic benefit either. In Ontario, the building Owner must reduce the rent by the "utility cost no longer borne". This rent reduction is calculated based on recent utility history.
Further, individual tenants are not required to switch over to tenant submetering, and so may opt to stay with shared costs under their current lease. Under current legislation, this situation can continue until a tenant moves out, so there are many apartment buildings with only a portion of the tenants submetered. Industry practice for submetering companies is to submeter the entire building at the time of system installation, and then activate suites one by one as they become available.
The benefit to the Owner is risk mitigation. Once a suite is submetered he/she no longer has to bear the risk of utility rates rising faster than allowable rent increases.
Use 20% of suite electrical use as a savings estimate. Be sure not to include electrical loads that will not be metered (fans, pumps, common area lighting)