Hot Water and Heat Submetering: How It's Measured and Billed

How hot water submetering works in central systems

Central domestic hot water systems use one or more central boilers to supply hot water to the whole building. Cold water enters the boiler room, heats up, and runs through a dedicated loop. To measure use under this layout, an installer puts a meter directly on the hot water line feeding each unit.

This meter records the exact gallons of heated water flowing into the apartment. Hot water wears down standard plastic parts, so these pipes require meters rated for higher temperatures. Modern wireless submeters report several times a day to an offsite reading system.

Resident statements then reflect the actual gallons used. At National Exemption Service (NES), we track continuous flow through our MyReads portal to flag a running toilet or a dripping faucet before it drives up the bill. The total amount billed to residents never exceeds the property's master-meter cost. Common-area use for laundry, irrigation, pools, and clubhouses stays with the owner.

Single meters versus dual meters for hot and cold lines

Plumbing layout decides whether an apartment needs one meter or two. Many newer apartments have one cold feed and one hot feed entering at a utility closet. Metering just the hot line tracks heated water, but most owners prefer to capture total water use through water submetering.

When a home has separate hot and cold incoming pipes, you can install submetering meters on both lines. The cold meter measures water for toilets and cold faucets, while the hot meter records water from the central boiler. Combining both reads gives you the total water use for monthly billing.

Older buildings with vertical plumbing risers work differently. In these properties, one unit might have three separate risers: one in the kitchen, one in a half bath, and one in the main bathroom. Opening drywall to put a meter on every one of those pipes usually costs more than the meters would recover. For those buildings, owners often turn to ratio utility billing (RUBS), which splits the bill without installing new hardware.

Billing the energy required to heat domestic water

A water meter measures liquid volume, not the fuel used to heat it. Central boilers burn gas or use electricity around the clock to keep water hot. A standard water meter records gallons, not therms or kilowatt-hours.

You can recover this heating cost by dividing the boiler's monthly energy bill by the total gallons of hot water the building used. That calculation produces a heating cost per gallon.

Residents then pay for their water volume plus their share of the heating fuel. Once residents pay for their own water, water use typically drops 15 to 30 percent.

Measuring space heat with BTU meters

Buildings with shared heating loops cannot rely on basic water meters. With hydronic heat, submetering measures energy, not water. The water circulating through baseboard radiators or fan coils never leaves the closed piping loop.

Because residents do not drink or drain this water, you must measure the heat extracted from the pipe. An installer places a British Thermal Unit (BTU) meter on the unit's supply loop. A BTU meter uses three parts:

• Flow sensor. Measures the volume of water moving through the heating loop.
• Temperature sensors. Records the water temperature as it enters and leaves the home.
• Calculator unit. Multiplies water volume by the temperature drop over time to calculate the heat energy delivered to the room.

BTU meters give you an accurate way to track heating in central loop buildings. These meters cost more than standard water meters, so owners use them most often in condominiums and large buildings.

Meter placement in units with individual water heaters

Many garden-style communities skip central boilers entirely. Each apartment has its own gas or electric tank in a closet or utility room. In these buildings, water, gas, and electric submetering follows a simpler path.

You do not need a high-temperature meter on the hot side. An installer places a standard cold water meter on the cold supply line entering the tank, or on the main cold line feeding the whole unit. Every drop of hot water that leaves the tank enters as cold water first, so metering the intake line captures all hot water use.

Access to that pipe determines the installation price. A standard submetering cost typically averages $150 to $300 per unit across a standard community. If a water heater sits in a cramped closet and blocks the main line, a plumber has to drain and move the tank to reach the pipe. That extra labor makes those units cost noticeably more.

When submetering hot water and heat makes financial sense

Submetering works best for communities with 80 or more units, including apartments, condominiums, townhomes, student housing, and mobile home parks. Smaller buildings are often better served by a small-property provider. Most properties earn back the install cost in 12 to 18 months from the utility costs they recover, and some sooner.

At one 337-unit community, NES added meters as leases renewed, so for a while both setups ran side by side. The 168 submetered units averaged 3,868 gallons per unit per month, 34% less than the 5,846 gallons used by the 169 units not yet metered. Their average bill was $54.22 a month against $84.72, 36% lower, or about $30 per unit. Across all 337 units, that gap is worth roughly $123,000 a year.

Billing for heat and the energy to heat water has its own rules, and they vary by state. Some places limit it or require approval first, so check what the law allows at your address. Our in-house compliance team does that before we quote.

We offer financing for properties that qualify. We also install nonproprietary meters backed by a warranty that you own outright, so you are never locked in to NES.

Related questions

• What Is Water Submetering? How It Works, Costs and Savings
• Gas Submetering: Can You Submeter Natural Gas?
• Types of Submeters: Water, Gas and Electric Meters Compared
• How Much Does Submetering Cost? Install Prices per Unit