Electric Submetering for Apartments: How It Works and Costs
Last reviewed October 2026Reviewed by Grant Forehand, Compliance Officer, 20 years with NES
How electric submetering works in master-metered apartments: utility-grade kWh meters, the four install steps, the rules to check, and what drives cost.
How does electric submetering work?
Electric submetering works by installing an individual, utility-grade kilowatt-hour (kWh) meter on the main electrical feed of each apartment, downstream of the utility's master meter. The submeter records the exact power that unit consumes, typically logging interval data every 15 minutes and transmitting it wirelessly each day. A billing company collects those reads, calculates each resident's bill based on their actual kilowatt-hour use, and bills them directly. The property owner recovers the cost of resident electricity while remaining responsible for common-area power, without ever billing residents more than the total master-meter utility charge.
Owners of master-metered communities with 80 or more units use electric submetering to shift electric costs to the residents who use the power. This article covers the physical equipment, the four steps to install a system, and the state rules that govern electric billing. By the end, you will know how to evaluate your building and what to expect during installation.
How electric submetering works
In a master-metered building, electric power flows from the local utility through a single central meter. The utility sends the property owner one large bill every month. Under that setup, the owner absorbs the entire bill or tries to cover it by raising rents across the board.
Submetering changes that setup by adding secondary meters inside the building's electrical system. A utility-grade solid-state meter sits on each unit's electrical feed, downstream of the master meter. It tracks the exact kilowatt-hours pulled by that specific apartment.
Modern systems capture usage data automatically. Transmitters send readings over a wireless network to a central collector, which forwards the data to the billing platform. Each month, the resident receives a utility bill for their measured kilowatt-hours, calculated from rates on the local utility bill.
The billing flow follows four steps:
- The local electric utility bills the property owner for total master-meter consumption.
- The submetering system records what portion each apartment used.
- Residents pay the submetering billing service for their metered use.
- Collections are remitted to the property to offset the master electric bill.
Common-area power stays separate. Electricity used by parking lot lights, leasing offices, elevators, clubhouses, and laundry rooms stays with the owner. The total dollar amount billed across all units never exceeds the master-meter cost from the utility.
How to submeter electric in four steps
Adding an electric submeter for each unit takes planning. (Our guide to types of submeters covers the hardware.) Skipping regulatory or electrical checks creates costly problems later.
- Confirm local regulations. Check the legal requirements for your city, county, and state before purchasing hardware or altering leases.
- Count and size the meters. Review your electrical panels to determine the voltage, phase, and total count of meters needed.
- Hire a licensed electrician for installation. Have qualified professionals install meters directly on the live electrical feeds serving each unit.
- Read and bill monthly. Collect meter data automatically and bill residents for their actual consumption in line with local utility regulations.
The biggest pitfall in Step 1 is assuming electric rules match water or gas rules. Electric is the most regulated utility to submeter. Some states do not allow electric submetering at all, while others require registration or utility commission certification before you bill a single resident. A missed filing can hold up the first bill.
For Step 2, the primary trap is ordering hardware without checking unit service variations. Older properties often have mixed panels. A meter sized for single-phase service will not work on a three-phase unit feed. Each meter must match the specific panel layout in that electrical closet.
In Step 3, property managers often underestimate access coordination. Electric submeters sit on live electrical feeds, so installation requires a brief power interruption. Using unlicensed labor or failing to give proper resident notice risks code violations, equipment damage, and tenant complaints. Licensed technicians who schedule around resident routines keep unit downtime under 30 minutes.
During Step 4, the common mistake is the rate. Where electric billing is allowed, the rules usually spell out how the rate is set. A flat rate or a markup the rules do not allow can mean refunds to residents.
1. Regulatory Review
- Focus
- Local and state compliance
- Primary Pitfall
- Assuming electric rules match water rules
2. Engineering & Sizing
- Focus
- Voltage, phase, and panel audit
- Primary Pitfall
- Ordering uniform meters for mixed electrical panels
3. Electrical Installation
- Focus
- Physical meter mounting by licensed pros
- Primary Pitfall
- Scheduling without notice or causing long outages
4. Ongoing Billing
- Focus
- Usage calculation and collections
- Primary Pitfall
- Using rate formulas that violate local utility rules
The equipment: meters, data collection, and software
A working submetering setup relies on four connected hardware and software components. Each piece handles a distinct part of the reading and billing process.
- Solid-state kWh meters. Electric submeters must meet utility-grade accuracy standards, specifically ANSI C12.20. These meters handle 120, 208, or 240 volt service in both single-phase and three-phase configurations. They measure true energy consumption using current transformers clamped around incoming power cables.
- Wireless data transmitters. Each meter connects to an automated data collection radio. These transceivers capture 15-minute interval data and transmit readings across a wireless mesh network or cellular bridge. Batteries or line power keep the transceivers running continuously.
- Central site collectors. A gateway mounted in a utility room or clubhouse receives transmissions from every unit transceiver on the property. It bundles the interval records and uploads them daily to the cloud via cellular link, eliminating manual, drive-by, or walk-up meter reading.
- Billing software. Dedicated submetering billing software imports the daily interval reads, validates the data for communication drops, and generates tenant bills. The software aligns resident billing cycles with the local utility's master-meter billing dates.
When evaluating equipment, verify that the hardware is nonproprietary. Proprietary systems lock you into a single billing provider because no one else can read their signal. Nonproprietary meters mean you own the equipment outright, backed by a warranty. You keep the freedom to switch billing providers whenever you choose.
Energy use and efficiency
When residents do not pay for their own power, they treat electricity as an unlimited resource. Thermostats stay at low temperatures all summer, lights burn in empty rooms, and large appliances run half-empty.
Tying energy costs directly to resident behavior changes how people consume power. Once residents see a direct connection between their daily habits and their monthly expenses, conservation follows naturally. Water use typically drops 15 to 30 percent once residents pay for their own, and power follows the same pattern: people use less of what they pay for.
Continuous 15-minute interval data shows details that a single monthly master bill hides. Property staff can look directly at when and where electricity is being pulled:
- Common-area waste. By subtracting the sum of unit submeters from the master meter, owners isolate true common-area usage. Spikes in common-area consumption often reveal lighting timers running during daylight hours or pool pump motors cycling improperly.
- Failing mechanical systems. When an air conditioning compressor or heat pump begins to fail, it pulls more current. Interval tracking flags unusual spikes in unit power before equipment breaks down completely.
- Vacant unit accountability. Electricity consumed between leases is tracked precisely. If a maintenance crew leaves air conditioning running in a turn unit, those kilowatt-hours are billed to the property, not pushed onto the incoming resident.
Rules for electric submetering
Electricity is subject to stricter legal limits than any other submetered utility. Electric utilities operate as heavily regulated monopolies, and public utility commissions guard against unauthorized power resale.
Before you buy hardware, confirm what the law allows at your exact address. General state guidelines are never enough. Rules can differ at the city or county level, and electric co-ops and city-owned utilities often have their own.
Some states require approval before the first electric bill goes to a resident. Some do not allow it at all.
Because of this patchwork, National Exemption Service maintains an in-house compliance team that tracks statutory changes across municipal, county, and state jurisdictions. NES checks the specific regulatory status of your property address before issuing a project quote. That check covers the rate, the resident notices and the billing cycle.
What electric submetering costs
Calculating your electric submeter installation cost involves different variables than water submetering. Water submetering projects usually have predictable per-unit plumbing layouts, but electric retrofits depend heavily on existing wiring and panel room designs. For that reason, electric installation costs cannot be quoted accurately without a site survey of your electrical distribution.
Several physical factors determine the overall project cost. Every building presents a distinct electrical layout:
- Panel location. If unit breakers are grouped in centralized electrical rooms on each floor, meter installation is efficient. If breaker panels are scattered inside individual apartment closets, wiring and labor increase.
- Service amperage and phase. Sizing meters and current transformers for high-amperage services or three-phase panels costs more than standard single-phase residential lines.
- Line access. Electric submeters sit on live main feeds. If electrical closets offer clear access to incoming cables, installation moves quickly. Crowded or antiquated panel boxes require extensive preparation.
- Data collection layout. The physical construction of your property determines signal strength. Dense concrete, brick, or steel structures require extra wireless repeaters to link meters to the central gateway.
Most communities recover the install cost in 12 to 18 months on average, sooner or later depending on rates and plumbing. Once the install cost is repaid, that operating cost reduction continues year after year. For properties seeking to protect working capital, NES offers equipment financing for qualifying communities, spreading costs out over time.
When electric submetering fits your property
Reviewing master metering vs submetering helps clarify if your building qualifies. Submetering is specifically designed for properties with master-metered electric service. It fits garden-style apartments, condominiums, student housing and mobile home parks with 80 or more units where the owner pays one electric bill today.
Submetering is generally not suitable for newer buildings constructed with direct utility meters. When an electric utility already reads individual unit meters and bills tenants directly, submetering offers no added recovery value.
If a site audit reveals that your electrical infrastructure makes submeter retrofits physically impossible or cost-prohibitive, you still have options. Ratio Utility Billing Systems (RUBS) allocate master electric bills using a mathematical formula based on unit square footage, bedroom count, or occupant count. RUBS requires no physical equipment, allowing utility recovery to begin immediately, though it is not permitted in every jurisdiction. NES provides both solutions and will advise you on the right fit for your property's mechanical design and regional legal constraints.
For new construction or adaptive reuse projects, planning your meter layout early makes installation simple. Consulting our developers and new construction team during electrical design ensures panels are arranged for low-cost meter installation before walls are closed.
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To find out what electric submetering will recover for your property, send us your unit count and 12 months of master-meter electric bills. An NES submetering specialist will evaluate your data and reply within one business day, followed by a complete recovery model within five business days. Call (800) 572-7060 or reach out online to schedule your review.