Should You Go For Direct Metering or Sub-Metering?

Michael Tobias
5 Minutes Read
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    Worried about the total electricity load in your building? You aren't alone. More residential complexes in Chicago and around the world are looking at different options to streamline the electricity load. While everything helps from the construction planning to electric design, here is what you should know.

    There are two different ways by which large multifamily residential buildings in Chicago are metered for their electricity consumption:

    - Direct metering

    - Sub-metering under master metering.

    If you are wondering as to which option is better for you, the answer isn't as simple as you would like. Here is a look at all that you need to take a look at.

    Direct Metering

    In building with direct metering, each family or apartment unit is individually metered by the utility which is responsible for supplying the electricity. The meter is also owned by the utility provider. Under direct metering, each Chicago residential unit receives their home's electricity bill at a residential rate from the utility. For multi-unit buildings, the utility sends an electricity bill for electricity usage in the common areas at the commercial retail rate.

    Master Metering

    Chicago buildings with master metering have their electricity supplied by the utility, and the utility has one single meter for the whole building. The utility bills only the building owner commonly at a rate due to which the bill is lower than the usual retail, residential rate. Residential units in the building are not metered separately, and the amount of electricity consumed by each apartment is not calculated or used to determine the utility bill.

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    Difference Between Direct-Metering and Master-Metering

    In the case of direct-metered residential buildings in Chicago, the residents only pay for the amount of electricity that is actually consumed by them whereas in case of master-metered buildings the owner divides the cost of the total electricity bill among all the residents without taking into account the amount of electricity consumed by each unit in the building. Under master-metering billing is done in a number of ways, either by equal division amongst all apartments or it is billed on the size or number of residents in an apartment.

    Submetering: The Combo That Works For Both

    Submetering billing system is the efficient way that has the advantages of both direct and master-metering systems. Submetering is another submeter that receives electricity from the master meter, and it permits building owners to measure the electricity usage in individual units by a sub-meter that is owned by the building and not the utility department.

    The building still receives its electricity at a less expensive commercial rate or bulk residential rate, yet the owner can bill electricity charges of individual apartment units based on their actual consumption. The Chicago utility sends just one bill to the building owner which the building owner then divides among the residents based on the usage shown by their respective meters.

    The building residents need not pay utility, and the builder-owner remains responsible for paying the electricity bills.

    Why Is Sub-metering better than Direct Metering?

    Sub-metering has a number of benefits to master-metering or direct-metering

    • The owner and residents both get to use electricity at lower costs
    • Entry into apartments is not necessary to read the submeters
    • Submetering promotes energy consumption

    A lot of times Chicago building owners don't charge residents separately for utilities but include the charges in the rent. Because of this residents may not try to conserve energy and even if they do they are unaware of the amount of energy they are saving. Therefore if a building owner decides to install a new boiler or make some other renovations, they should install sub-meters too.

    By doing so, they can:

    Save Energy- Shift from master-metering to sub-metering can reduce individual apartment unit's electricity consumption by up to 10%-25%.

    Lower utility costs- Building owners get electricity at cheaper rates whose benefits are used the tenants or apartment owners too.

    Energy charges are Charged Accordingly

    Since submetering charges on the amount of electricity used residents only pay for what they use. As per data 20-26% of electricity usage of a Chicago, building is used only by 10% of residents. Under master metering, these residents would have paid the same as other residents.

    Submetering is beneficial for about 65%-70% of residents. The only people who may more are the ones who use more electricity. 

    Submetering helps owners- Submetering allows building owners to set up a predictable electricity budget as they need to pay electricity charges only for the common areas irrespective of the fact whether the building is a condominium, cooperative, or rental building.

    Helps the environment- Submetering is beneficial for the environment and energy companies as less energy is wasted and less energy is consumed which in turn means less energy is generated so less amount of fossil fuels are used which are still the primary method of power generation in Chicago. Burning fewer fossil fuels means less pollution in the environment and better air quality.

    Why Are Sub Meters Better Than Direct Meters?

    Here is a look at how sub meters might be a better options for large buildings with more residents.

    • Submeters promotes energy conservation among building residents as they don't want to be seen as someone who wastes resources.
    • Submeters offers a cheaper electricity rate for building residents as the electricity is bought in retail by the building owner at a cheaper rate than direct metered electricity.
    • Submeters are convenient for building owners too as they need to pay only a fixed amount of money for electricity used by common areas.
    • Going from direct-metering to master-metering to submetering comes with a big bulk discount for the residents of the Chicago apartment buildings.

    Why Are Sub Meters Not Used Much In Practice

    In spite of the advantages, sub meters aren't that popular for domestic use for a few reasons.

    • Submeter are costly and cost about $400-$500 for every unit.
    • Taking monthly reading also includes some charges.
    • Lack of space for installing meters.
    • Not many building owners are ready to make such an investment, and similarly, not all residents may agree to pay for installing sub-meters in their homes.

    If you're looking for a sub meter for your house in Chicago, you would need to take a look at whether it's going to be cost effective for you. For large buildings, it might well be so. 

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    Tags : Electrical Engineering sub metering direct metering

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