Benefits of Smart Metering

Smart metering provides a wide range of benefits for different participants, including building owners, managers, tenants and energy suppliers. The core driver for this is the availability of high frequency data on consumption (and generation, e.g. from roof top solar PV) and the performance of buildings or even specific building equipment. For larger and more complex buildings such as multi tenanted offices or mixed use developments, the magnitude of the benefits depends to a certain degree on the level of submetering. It makes a significant difference whether only the main incomers to the building are smart metered, or if this extends to floor level and potentially even circuit level.

As a general rule, the more data is available, the more benefits are to be had. That presumes, of course, that the data is appropriately analysed, visualised and shared with the key stakeholders (more on this in the Data Analysis section).


 UserBenefits of Smart Metering
owner1Owner / landlord- More detailed and regular information on building performance
- Identification of inefficiencies and savings opportunities
- Validation of impact of savings measures
- Better tenant engagement & satisfaction
- Higher levels of rentability and increased asset value
manager1Building manager- Operational efficiency increase (automated readings and calculation of bills)
- Better reporting performance to building owner
- More appropriate allocation of service charges
- Opportunity for predictive maintenance (vs reactive) and higher levels of tenant satisfaction
tenantTenant- Readily available information on own consumption (for energy efficiency and reporting purposes)
- Service charge payments based on actual consumption vs. pro-rata across all tenants based on floorspace
- Reduced likelihoods of negative impact on business operations from building equipment failures (if detected via predictive maintenance)
supplierEnergy supplier- Savings from automated readings (no "truck roll" required to take manual readings)
- More accurate bill information - higher customer satisfaction and fewer complaints
- Smart metering is key building block for demand response programmes
- Possibility to sell additional products and services based on consumption profiles
- Increased reliability of electricity supply


Cost-Benefit Analysis – Case Studies

In most cases, smart metering comes at a cost, especially when it is retrofit to large and complex buildings. Even where smart meters are being rolled out by energy utilities to residential households there is of course a cost, which is ultimately born by the consumer.

Experience shows however that for both scenarios – commercial and residential settings, smart metering makes financial sense. While the cost for initial installation (the capex) and ongoing operations (opex) of smart metering is not insignificant, the benefits mentioned above result in attractive results from a return on investment (ROI) perspective. Again, it is crucially important for the data captured by the smart metering system to be fully analysed and shared. Many systems have been installed for which the data is not regularly made available to key stakeholders, or only in limited or infrequent ways.

The table below lists a number of case studies from the US (link to source). If you’d like to add your own experience, please get in touch via our Contact form.


OrganisationUse caseDescription
Vornado Realty TrustLarge office building (USA/NYC)In July 2009, Vornado Realty Trust introduced submetering using hourly consumption data to a major tenant in New York City that occupies nearly 400,000 square feet of commercial office space. The tenant’s average stabilized energy use was 1,080,600 kilowatt-hours (kWh) quarterly (4,322,400 kWh annually). Using the new hourly consumption profiles, the tenant identified energy-saving opportunities.
Based on a comparison of quarterly data comparing usage from April 26–July 26, 2009, to April 26–July 26, 2010, the tenant has saved on an annualized basis:
• 795,850 kWh in overall consumption, or 18 percent below the baseline
• 57 kW in reduced demand, or 8 percent
• An overall total savings of $160,000
• 266 metric tons of carbon equivalent (expressed as tenant carbon footprint)
Bank of America BuildingLarge office building (USA / San Francisco)About half of the 52-story Bank of America Building in San Francisco was submetered after energy managers learned that tenants exceeded by as much as three-fold their energy allowance of 3 kilowatts per square foot (kW/sq ft). More than 120 submeters were installed, and the property owner saved $1 million in excess energy usage in the first year alone. The cost of the submetering hardware and software in this application resulted in a payback period of days, not years, complemented by energy usage and cost savings of 30 percent per year.
AdobeLarge office buildings (USA)Adobe Systems Inc. installed real-time main electric meters (revenue graded and Ethernet ready) in three high-rise office buildings, totaling just under 1 million square feet. The facilities included a cafeteria, fitness center, and 30,000 square foot data center. The meters were purchased and installed at a cost of $19,969. Adobe spent a total of $1.1 million on energy and energy-related projects, received $350,000 in rebates for these projects, and saved $1 million per year in reduced costs. Adobe earned a 122 percent return on investment, with a 10-month average payback. Shortly thereafter, Adobe installed real-time digital water meters (pulse meters) on cooling towers to record water loss through evaporation and water leaks in order to reduce its sewage treatment bill. The installation cost was $43,000, and the savings attributed to reduced sewer treatment charges resulting from water leakage totaled $12,000 that year.
NYSERDALarge portfolio of residential buildings (USA / NYC)For multi-family residential dwellings, the State of New York and its energy research arm, NYSERDA (New York State Energy Research and Development Authority), have been prolific in facilitating the implementation of submetering and accurately documenting energy-saving results. In late 2009, NYSERDA released an updated survey of their submetering case studies for multi-family residential buildings. This report13 confirmed their estimated savings of 18–26 percent through submetering using new and prior case studies on rent-stabilized apartments.
Southern Connectiut State UniversityUniversity campus (USA)Southern Connecticut State University (SCSU) responded to a legislative mandate to accurately distribute costs associated with various university buildings in accordance with their source of funding. This initial project consisted of installing 14 submeters at various locations. The intent was to identify where older, obsolete equipment needed to be replaced. New high-performance equipment was installed along with digital controls to maximize energy savings. Rebates were applied for and granted for these projects; in some cases, the rebate paid up to 87 percent of the equipment premium. The average cost to purchase and install a submeter connected to the Direct Digital Control system was approximately $3,000.
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