Most property managers use one of two methods to determine their tenants’ energy costs: square footage-based billing, or submetering.

Square footage-based billing is simple: take the total amount of energy that was consumed during the previous billing cycle, and divide it amongst all of your tenants. Each tenant’s individual bill is directly proportional to the size of the space they are renting. For example, let’s say this month’s bill is $500. You have three tenants: one rents a 5,000 square foot space; one rents a 3,000 square foot space; and one rents a 2,000 square foot space; Based on the size of their unit, the first tenant would pay $250; the second would pay $150; and the third tenant would pay $100 – regardless of how much energy they actually used during that time period.

Submetering is a far more accurate and fair solution. Property managers can install a power monitoring instrument, known as a submeter, in all of their rental units. This device tracks how much energy is consumed by each individual unit. Tenants are then billed in accordance to their total energy consumption. This ensures that everyone pays for what they use, and no one gets the short end of the stick.

How it helps the tenants.

Tenants prefer to have their spaces submetered because it allows them to be billed fairly for their energy usage. With square footage-based energy billing, tenants are punished for renting larger spaces – even if they use less energy, they still have to pay more. Submetering prevents this problem, while also giving tenants extra incentive to save energy because it translates into direct monetary savings for them.

How it helps the property managers.

For the property managers, submetering makes life easy. There is no need to divide the energy bill by total square footage in order to find out how much a tenant needs to pay: simply go by the number on the meter. Some software – such as EnergyReporter EXT – will even bill your tenants automatically. Properties that utilize submetering are also more attractive to potential tenants, meaning new business will be easier to acquire.

For 40 years, property managers around the world have trusted Electro Industries for their power monitoring needs. Visit our website for a complete list of our energy management solutions, or give us a call at 866-928-7908.