Submetering is the practice of installing meters behind a building’s master utility meter so each apartment’s water, gas, or electric use is measured individually. The utility still bills the property on one master account. The property, or a billing company working for it, then bills each resident for what their own meter recorded. This guide walks through how that works end to end.
Why buildings need submeters in the first place
When a utility installs a meter in every unit during construction, residents open their own accounts and the property never touches the bill. Many multifamily buildings were not built that way. The utility installed one or two master meters, the property pays the whole bill, and the cost has to be recovered somehow: through rent, through a formula allocation called RUBS, or through submeters. Submeters are the only option that bills each resident for their actual use.
Step 1: The meter
A submeter is a small meter installed where the utility enters the unit or, for electricity, at the unit’s breaker panel or a central distribution panel.
- Water meters install on the unit’s supply line. Buildings with a single point of entry per unit use one meter; stacked-riser buildings with several entry points use point-of-use meters on each line. Hot and cold are metered separately where the building’s water heating requires it. Look for meters that meet AWWA C708 performance standards and are certified to NSF/ANSI 61 and NSF/ANSI 372 for drinking water contact and lead content.
- Gas meters install on the unit’s gas line, with the regulator and venting sized to the appliances served. Gas is the most technical of the three to submeter because of code and safety requirements.
- Electric meters install either inside each unit at the breaker panel or as multi-meter units at a central electrical room. Modern electric submeters hold their reading through a power outage.
Step 2: Reading the meters
Older systems required someone to walk the building and read each meter by hand. Modern systems are wireless. Each meter has a transmitter that sends its reading to a gateway on site, which forwards it to the billing platform, typically daily. Nobody enters the unit to read the meter, and because reads arrive every day, the system can flag a meter that stops reporting or a unit whose water use suddenly jumps, which usually means a leak or a running toilet.
Step 3: The bill
Each billing cycle the platform takes the period’s consumption for each unit, applies the rate the utility charged the property, and produces a resident bill. The math is transparent: the resident sees their prior read, current read, usage, and rate, the same way a direct utility customer would. In most states the total billed to residents cannot exceed what the utility charged the property, and common-area use stays with the owner.
Residents pay either directly to the billing company through a portal, by card, or by check, or together with rent to the property, depending on which model the owner chooses. See Resident Billing for how the two models differ.
Step 4: Ongoing service
Meters, transmitters, and gateways are hardware, and hardware fails occasionally. A full-service submetering provider monitors the network, replaces failed equipment, and handles resident questions about bills. When a provider only sells equipment and leaves billing and maintenance to the property, that work lands on your staff.
How installation works
Retrofits of existing buildings usually take one day to one week depending on unit count and plumbing. Technicians need unit access and typically shut off water briefly at each unit. Gas installations use a licensed contractor and carry permits and inspections. Electric installations can be done by the provider or, in a self-install model, by the property’s own electrician using equipment the provider preps and ships.
New construction is the cheapest time to submeter. Meter locations and read infrastructure go on the drawings during design, and the plumber or electrician installs meters during rough-in. Some jurisdictions now require this: Colorado, for example, requires direct metering or submetering for residential projects permitted on or after July 1, 2027. See our Colorado HB26-1013 update.
What drives the cost
Four things: the number of units, the plumbing or electrical configuration (one meter per unit versus several), retrofit versus new construction, and which utilities you meter. Providers quote per property. What you should expect in return is a per-unit installed cost plus a monthly billing fee, with maintenance included or clearly priced.
Submetering vs. RUBS
Where submetering is not practical, owners use a Ratio Utility Billing System, which allocates the master bill by a formula such as occupancy or square footage. RUBS costs nothing to install but is less precise, produces less conservation, and is increasingly regulated. Minnesota now prohibits RUBS for electricity and dictates the formulas for gas and water. Colorado sets four conditions on any RUBS program. Our RUBS guide covers the tradeoffs.
Frequently asked questions
Does submetering lower a property’s utility costs?
It lowers the owner’s share, because residents pay for their own use. It also tends to lower total consumption, since residents who pay for water use less of it.
Do residents pay more than they would with a direct utility account?
No. Residents pay the property’s rate for their own measured use, with no markup, and in most states the property cannot bill more in total than the utility charged.
Can a building be submetered after the fact?
Almost always. A site survey confirms the plumbing or electrical layout and which meter type fits.
Who owns the meters?
Typically the property owner. The billing provider installs, reads, and maintains them.
How accurate are submeters?
Water submeters built to AWWA C708 meet the same performance standard municipal water meters do. Electric submeters are built to utility accuracy standards.
Talk to us about submetering your property. UMS designs, installs, reads, and bills water, gas, and electric submetering for multifamily properties in all 48 contiguous states.