Submetering and Allocation
Last reviewed September 2026NES Editorial, checked by the Billing & Compliance team
Measured billing or formula-based billing. The difference comes down to meters.
What is the difference between submetering and allocation?
Both submetering and allocation pass utility cost to residents, but they get there differently. Submetering uses a meter on each unit to measure exactly what that resident used, so the bill is based on a real reading. Allocation uses a formula instead of a meter, splitting the master bill by factors like occupancy or square footage when meters are not an option or do not make financial sense. Submetering is the most accurate and the fairest because people pay for what they actually use, which is why it drives a 15 to 30 percent drop in water use. Allocation, also called ratio or formula-based billing, has almost no setup cost and works where meters cannot go. NES offers both for properties with 80 or more units and will recommend the right fit based on your property and local rules. The total billed to residents never exceeds your master-meter cost.
Measured vs formula-based
Submetering reads each unit and bills the exact amount used, so it is precise and easy to defend to residents. Allocation does not measure individual use. It takes the master bill and divides it by a fair formula, which is useful when installing meters is not practical or the money is better spent elsewhere. Submetering costs more upfront but bills exactly; allocation costs almost nothing to set up but estimates.
How to choose
- Pick submetering when units can be metered and you want exact, per-resident billing and the biggest conservation drop.
- Pick allocation when meters are not possible or not cost-effective and you still want to recover utility cost fairly.
- Either way, local rules decide what is allowed. NES checks and monitors regulations for each property we serve.
Related questions
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