Submetering vs Ratio Billing: Which Costs More?
Last reviewed September 2026NES Editorial, checked by the Billing & Compliance team
Submetering costs more to set up but bills exactly. Ratio billing costs almost nothing but estimates.
Is submetering more expensive than ratio billing?
Upfront, yes. Submetering installs a meter on each unit to measure exact water, gas, or electric use, which means paying for meters, repeaters, and installation by a plumber. Most owners recover those costs in 12 to 18 months, and some sooner. Ratio or formula-based billing needs no equipment, so the initial investment is almost nothing. The trade-off is accuracy. Submetering bills each resident for exactly what they used, which is the fairest method and drives the biggest drop in consumption. Ratio or formula-based billing splits the master bill by a formula like occupancy or square footage, so it is an estimate, not a measurement. The right choice depends on your property, your budget, and local rules, which change often. NES offers both, checks the regulations for each property we serve, and focuses on communities with 80 or more units.
What you pay for, and when
Submetering has real upfront cost: meters, repeaters, and a plumber to install them. Most owners recover that in 12 to 18 months, because residents conserve and you stop absorbing the bill. Ratio or formula-based billing has almost no setup cost since there is no equipment, so it starts recovering cost right away, but every bill is an estimate rather than a real reading.
Submetering vs ratio billing side by side
- Submetering: higher upfront cost, exact per-unit billing, biggest conservation drop, payback usually 12 to 18 months.
- Ratio or formula-based billing: almost no setup cost, estimated billing by formula, works where meters cannot go.
- Local laws decide what is allowed for either. NES verifies and monitors the rules for each property.
Related questions
Get submetering and compliance updates
A short email when we publish new guides or a state changes its billing rules. No sales sequences, and you can unsubscribe any time.
We handle your email as described in our privacy policy.
Thinking about submetering your property?
NES installs the meters, reads them, and bills your residents, in-house since 1968. Send your property details for a free, no-obligation estimate.
Prefer a form? Open the quote page.