November 2009

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The Business Case for Submetering
Show me the money!

Daryl Cowie

Daryl Cowie,
Business Development Manager,
Wescon Technologies 

This three part series looks at the business case for submetering, the measurements required to succeed, and a comparison of available submetering models. By the end you should know the right questions to ask when choosing a submeter supplier.

The Energy Management Challenge

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The business case is simple. Energy costs today regularly account for 20% to 30% of total building operation budgets. Good energy management programs have been repeatedly proven to save between 15% and 30% on energy costs. This equates to somewhere between 3% and 9% of your total operating budget. That's money in your pocket (or at least the owner's pocket). Numbers like this are hard to argue with.

Despite the recent shift towards green technology and energy efficiency only a small percentage of commercial and industrial buildings operate anywhere close to maximum energy efficiency.

Over the past few years study after study has reported 15% to 30% savings in energy usage directly related to submetering programs. For facilities with over $1 million in energy spending this equates to annual six figure savings and systems that pay for themselves in less than a year. For smaller installations the paybacks are still very respectable and the savings continue year after year. Given the high cost of energy the value of energy management programs is no longer in question.

So if the evidence is there, why do the vast majority of commercial and industrial buildings in North America still have such poor systems or even no submetering system at all? The question is no longer one of system viability. The question has become how to wade through the different system approaches to find a solution that's right for you.

Let's face it, choosing the right energy management system is no trivial matter. There's a lot to consider. Having submeters installed, reading meters and analyzing the data sounds time consuming. As facilities managers take on more and more responsibility for day to day emergencies and operational cost control many simply donít feel they have the time or the knowledge to implement an effective energy management strategy. They need education and support from their owners and management to make the time and reap the rewards.

Getting Control of Your Spending

We all keep hearing that the value of submetering for energy management has been proven over and over again, but how exactly does this save people money?

As every good facilities manager knows you must understand the cost structure of everything under your mandate in order to manage it effectively. Energy management is no exception and offers a significant cost savings opportunity since it accounts for such a large portion of total operational costs. If you canít measure it you have very little chance of managing and improving things effectively. That's day one of cost control class.

It's not enough just to know that the number on your utility bill is too high. You need to drill down and find out exactly where your energy dollars are going. Without some level of visibility into actual energy usage the best you can hope for is to guess at what to try next and hope you get it right some of the time.

A much more productive approach is to understand energy usage patterns and then make changes that you already know will make a difference on your utility bill. Just showing people what activities are costing them money is often enough to change usage patterns and save as much as 10% to 15% on your power bill.

A good measurement and monitoring system is the key to everything (in part 2 we will devote our discussion to exactly what a good measurement and monitoring system needs to include). Smart meters have come a long way in the last few years and itís a good time to check out the latest technology. Automated reporting systems are more cost effective than ever before. Instead of running around to each meter and copying down the numbers, meters can now put the data on a web page for you or email you daily reports automatically. Things are a lot less expensive and easier to use than the submetering systems of 10 or 20 years ago.

[an error occurred while processing this directive] Once you see where your energy dollars are going you can easily use that information to develop a list of low-cost and even no-cost energy savings opportunities based on changes that you already know will save you money.

Instead of guessing at how to save money you now know in advance whether more efficient air conditioners, new lighting systems or load timers will pay for themselves. You might also find that you just need to tell a few people on the 4th floor to start turning things off at night.


A strong energy management program can save up to 9% on building operating costs. You can either start guessing at how to save that money, or install a submetering system that will give you the visibility you need to make smart decisions.

In part 2 we'll look at exactly what measurements and features you need to insist on having in your submetering system to make it effective, as well as some nice available options.

About the Author:

Daryl Cowie is business development manager at Wescon Technologies. For more information on how to justify and choose a system that fits your needs visit to get 2 free reports:" Show Me the Money - real life submetering cost savings examples" and "The Facilities Manager's Submetering System Checklist - basic requirements, options & standards"


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