Commercial sub-meters are fitted within a premises’ electricity circuits or gas pipes to track energy consumption separately for specific units, equipment, areas, or departments.
This guide explains commercial energy sub-metering, explaining how they work, the different types, their use cases, the equipment involved, costs, and common issues.
What is a sub-meter?
A sub-meter is a secondary meter installed downstream of a property’s main meter, measuring the gas or electricity used by a specific part of a site, such as an individual unit, tenant, or piece of equipment.
The main meter still records total consumption for the site as a whole, and is what the business energy supplier bills against.
Sub-meters record usage across specific segments and so are commonly used in multi-occupancy buildings to bill tenants individually, to improve energy efficiency by monitoring usage more granularly, or to achieve energy and sustainability certifications.
Because they are downstream of the mains supply, sub-meters are not associated with an MPAN or MPRN, which identify the mains supplies for electricity and gas respectively.
How does business sub-metering work?
Sub-metering operations as a whole are simple and work the same as any meter but used for internal purposes, separate from the main supply meter.
Here is how it works:
1. Each sub-meter records its own consumption
A sub-meter measures the gas or electricity passing through a specific circuit, unit, or piece of equipment, giving a separate consumption figure distinct from the site-wide total on the main meter.
2. Readings are collected and recorded
Readings are either taken manually, by visiting each meter and noting the figures, or automatically, by a data logger and gateway that sends them to a central platform.
They are then stored in anything from a simple spreadsheet to an energy management system (EMS), which brings all sub-meter data together, so companies can track and analyse energy use across various sites.
3. The main meter remains the billing point
The business still pays a single bill based on the main meter, at its contracted rates, and uses sub-meter data to allocate or recharge that cost internally.
Since those rates determine each department’s or tenant’s share, it is necessary to keep track of current business electricity prices and business gas prices to calculate their total cost.
4. Data is analysed to improve efficiency
Sub-meter data is valuable for consumption analysis to identify the highest-consuming areas or equipment, reveal waste such as out-of-hours usage, and flag unusual spikes that may indicate faults. This helps businesses target efficiency improvements and measure the results.
Types of sub-metering for businesses
Sub-meters vary by the utility they measure, the type of circuit or cable involved, and how their readings are collected. Electricity sub-meters in particular come in several distinct types depending on the load and circuit involved.
Below are the main types:
Commercial electricity sub-meters
Electricity sub-meters measure the cumulative electrical energy (in kWh) passing through a circuit, and there are various types depending on what is being measured, the cabling, and the size of the load:
CT-operated sub-meters
Used for: Electricity metering of larger circuits and three-phase loads.
A CT-operated sub-meter uses a current transformer (CT) that clamps around an existing cable to avoid having the wiring pass directly through the meter.
It measures the current flowing through it indirectly, making it suitable for heavier loads such as a floor of offices, a small industrial unit, or shared HVAC plant, where the cable itself doesn’t need to be broken into or rewired to fit the meter.
Whole current sub-meters
Used for: Electricity metering of small sub-tenants on single-phase loads.
A whole current sub-meter has the circuit’s wiring passed directly through it, measuring all the current flowing through the connection so that usage can later be sub-billed to that specific tenant or area.
It is easy to install and accurate for small loads, but impractical for larger circuits, where passing the full current directly through a meter isn’t feasible.
Multi-circuit sub-meters
Used for: Electricity metering across many single-phase circuits from a single site.
A multi-circuit sub-meter monitors several small circuits from one unit. It is used on larger sites, such as a multi-let office building or a business park with several tenants, reducing the amount of individual metering hardware required to cover the whole site.
Rogowski coil sub-meters
Used for: Electricity metering of large or irregularly shaped conductors.
A Rogowski coil is a flexible current sensor that wraps around a conductor, rather than the rigid clamp used in a standard CT.
This makes it suited to larger or awkwardly shaped cables and busbars, such as those found in a factory’s main distribution board or a data centre’s power infrastructure, where a standard CT wouldn’t fit.
Gas sub-meters
Used for: Gas metering at tenant, building, or process level.
Gas sub-meters measure the volume of natural gas passing through them, in cubic metres or cubic feet, which is then converted to kWh using the gas’s calorific value and a volume correction factor.
Commercial gas sub-metering typically uses diaphragm meters, which measure gas flow using a system of internal chambers that fill and empty as gas passes through.
These are fitted downstream of the primary meter to measure gas used by a specific tenant, such as a restaurant unit in a shared building, or a specific process, such as a commercial kitchen or boiler system, and must be installed by a suitably qualified gas installer.
Manual, automated or smart sub-meters
Sub-meters can also differ in how their readings are collected and transmitted, with there being three main types:
- Manual sub-meters: Requires someone to physically visit the site and record the reading from each meter at set intervals.
- Automated meter reading (AMR): Collects readings automatically via local sensors or a signal picked up periodically.
- Smart or advanced metering infrastructure (AMI): Like AMR but two-way (it can receive configurations) and continuous, so it transfers data in real time, typically via Wi-Fi, cellular, or a cloud-connected platform.
Which type of businesses use sub-metering
There are various use cases for sub-metering, so it is practiced by many companies across various industries, some as part of their core business, others for cost cutting, or compliance.
Here is a list of the most common use cases for UK companies:
- Multi-tenant landlords and property managers: Shopping centres, business parks, and shared office buildings use sub-metering to bill individual tenants for their own usage, rather than each unit having its own separate supply.
- Businesses with multiple buildings or sites: Organisations wanting to compare or manage usage, generation or storage separately across different locations.
- Large businesses with several departments or cost centres: Organisations that want to attribute usage to specific departments, floors, or cost centres, allowing each to manage its own energy budget internally.
- Businesses with high-consuming plant or equipment: Manufacturers, data centres, or sites with heavy machinery use sub-metering to isolate the energy use of specific equipment, typically for maintenance or efficiency monitoring.
- Businesses with on-site generation: Sites with energy generation and storage assets use sub-metering to track how much power is generated, stored, or exported, separately from what’s drawn from the grid.
- Businesses with energy-efficiency targets: Companies looking to actively reduce consumption use sub-metering to identify where energy is being used inefficiently at a more granular level.
- Businesses with ESG or regulatory reporting requirements: Schemes such as Streamlined Energy and Carbon Reporting (SECR) or the Energy Savings Opportunity Scheme (ESOS) require granular energy data to accurately break down usage by source or activity.
Added benefits of sub-metering for businesses
Aside from the specific use cases that make sub-metering necessary, businesses that have it in place, or choose to install it voluntarily, often find it brings various advantages beyond the original reason for installing it:
- Greater visibility: Having granular data readily available makes it easier to make informed decisions later, such as where to invest in efficiency improvements or where consumption is trending upward.
- Easier scaling to new tenants or departments: Once the infrastructure and process for sub-metering is in place, extending it to a new tenant, floor, or department is far more straightforward.
- A head start on future certifications or compliance: Businesses with sub-metering in place are better positioned to meet future ESG, sustainability, or building certification requirements, without needing to retrofit a monitoring system under time pressure.
- Groundwork for automation and smart building systems: Sub-metered data can often feed into building management systems or automation setups later on, making it easier to introduce smarter energy controls without adding entirely new infrastructure.
What equipment is used in commercial sub-metering systems?
Sub-metering systems are made of various pieces of equipment aside from the sub-meter. The data it captures needs to be recorded, transmitted, aggregated, processed and presented in a useful manner.
There are three categories of equipment:
Sub-meters
The sub-meter device itself measures the amount of energy used in kWh at a specific circuit, area, or supply.
Data loggers and gateways
A data logger records the readings taken by each sub-meter, converting them into a digital format the rest of the system can use, and often storing them locally for a period in case of a communication interruption.
A gateway handles the actual transmission of that data onward, either to a local system on-site or a cloud-based monitoring platform via a wired network connection, Wi-Fi, cellular, or a dedicated wireless protocol suited to low-power devices spread across a site.
These two functions are sometimes combined into a single device, particularly on smaller installations, but on larger sites they’re often kept as separate components.
Sub-metering software and dashboards
Once data reaches a monitoring platform, sub-metering software processes it into a usable form, offering a range of capabilities, such as:
- Dashboards: Showing consumption, generation or storage by tenant, department, or circuit.
- Usage report templates: For auditing consumption across a site, department, or period.
- Sub-billing templates with auto-send to tenants: Automating the recharging process based on each tenant’s recorded usage.
- Sustainability reporting templates: Formatted to meet certification or compliance requirements, such as SECR or BREEAM.
- Alerts and anomaly detection: Flagging unusual spikes or drops in usage that may indicate a fault, leak, or equipment left running unnecessarily.
- Historical trend analysis: Comparing usage over time to track the impact of efficiency measures or seasonal changes.
- Integration with wider energy management systems (EMS): Feeding sub-meter data into a broader EMS, allowing consumption data to sit alongside other building or site controls.
Common commercial sub-metering problems
Sub-metering systems can run into various recurring issues, most of which relate to accuracy, connectivity, or how disputes are handled rather than the concept itself.
- Sub-meter totals not matching the main meter: The sum of all sub-meters rarely equals the main meter’s reading exactly, due to line losses, unmetered communal areas, or timing differences between readings.
- Communication or connectivity failures: Automated sub-meters relying on Wi-Fi, cellular, or a wireless protocol can lose connection, resulting in gaps in data or a fallback to estimated readings.
- Calibration drift over time: Meters can become less accurate over years of use, requiring periodic recalibration or replacement to remain reliable, particularly where used for tenant billing.
- Tenant disputes over billed usage: Since tenant billing sub-metering isn’t independently verified by the supplier, tenants can query or dispute charges, and resolving this requires clear records and, in some cases, third-party verified metering.
- Retrofit installation challenges: Adding sub-metering to an existing building can be more complex and costly than installing it during construction, particularly where cabling or pipework isn’t easily accessible.
Who installs and manages commercial sub-metering systems?
There are many different organisations potentially involved in installing and managing a sub-metering system. It may include the following parties:
- Sub-metering specialists and installers: Carry out the physical installation of sub-meters and associated hardware, working to the relevant electrical or gas safety standards.
- Energy management providers: Third-party companies that manage sub-metering and consumption data on a business’s behalf, often as part of a wider energy management service.
- Building Management System (BMS) providers: Manage the broader building controls, such as HVAC and lighting, that sub-meter data is often integrated with.
- Landlords and property managers: In multi-tenant or leased sites, commission the installation, decide what needs metering, and manage tenant billing and disputes on an ongoing basis.
- In-house facilities or energy managers: In larger businesses, oversee sub-metering internally, using the data for departmental reporting, efficiency initiatives, or compliance rather than tenant billing.
- Energy suppliers: Some commercial electricity and business gas suppliers offer sub-metering as an additional service, including consolidating sub-meter data into a single itemised bill for the customer.
The process of installing business sub-meters
Installing sub-meters is considered a project in itself, that goes from initial assessment through to the system going live. Here’s the process step by step:
1. Site survey and assessment
The business first defines the reason and scope of sub-metering. An electrician, gas installer, or specialist sub-metering contractor visits the site to identify where the relevant circuits, cables, or pipework are, and confirm what’s practically achievable given the site’s layout.
2. Choosing the right equipment
Based on the survey, the appropriate sub-meters are selected, whether whole current, CT-operated, multi-circuit, or Rogowski coil for electricity, or diaphragm meters for gas, along with the data loggers, gateways, and communication method needed to collect and transmit readings.
3. Installation and wiring
The sub-meters are physically fitted. Electrical installations must be carried out by a qualified electrician, and gas installations by a suitably qualified gas installer, given the safety requirements involved.
4. Connecting to a data logger or gateway
Once installed, each sub-meter is connected to a data logger or gateway, which captures its readings and prepares them for transmission to a monitoring platform, whether stored locally or sent to a cloud-based system.
5. Configuring the monitoring software
The monitoring platform is set up to correctly identify each sub-meter, typically labelling it by tenant, department, or circuit, so that readings are attributed to the right area once live.
6. Testing and commissioning
The system needs to be tested to confirm each sub-meter is recording accurately and that data is reaching the monitoring platform correctly, with any faults or misconfigurations corrected at this stage.
7. Handover and ongoing monitoring
Once commissioned, the system is handed over for regular use, regardless of the application. Regular checks are needed to ensure meters remain accurate and connected over time.
How much does commercial sub-metering cost?
The price for commercial sub-metering depends on the number of meters, the type of installation, and how much ongoing monitoring and support is needed.
Costs generally break down into a few components:
- Survey, design and installation: Usually quoted and delivered as one package on straightforward sites, covering the site assessment and the physical fitting of meters. It is one of the largest cost components, and higher for gas installations given the additional safety requirements involved.
- Meter equipment: The sub-meters, with cost varying by number and type. A simple whole current meter for a small circuit costs considerably less than a CT-operated or Rogowski coil setup for larger or more complex loads.
- Communications: The hardware and connectivity needed for automated collection, such as a gateway and a data connection, an added cost that manual sub-metering avoids entirely.
- Software: Monitoring platforms are usually priced on a subscription basis, scaling with the number of meters connected and the features required, such as tenant billing or sustainability reporting.
- Commissioning and ongoing support: A modest one-off cost to test and verify the system, followed by ongoing costs such as recalibration or software subscriptions. Some providers bundle all of this, along with equipment and installation, into a single managed service fee instead.
Regulations for tenant sub-metering
Whether a business tenant is protected on sub-metered charges depends on whether the tenant is domestic or commercial, and what the lease actually says.
- Domestic tenants: Protected by Ofgem’s Maximum Resale Price rules, capping charges at no more than what the landlord pays their own supplier. This still applies to a domestic unit, such as a flat above a shop, even where the overall supply is on a business contract.
- Commercial tenants: Not covered by this cap, the price charged is a contractual matter set out in the lease, not regulated by Ofgem.
- Meter accuracy: Applies regardless of tenant type, any meter used for billing must be of an approved design, overseen by the Office for Product Safety and Standards. An unapproved meter gives a tenant genuine grounds to challenge a charge.
How to use sub-metering data effectively
Getting value from a sub-metering setup depends largely on whether the data results in accurate and useful intelligence where action can be taken. The following are the best practices that make the largest difference:
- Establish a baseline: Puts the data in context to identify real trends. Record typical consumption over a representative period, such as a full season or year, to be able to judge whether a reading is genuinely unusual or simply normal variation.
- Monitor regularly: Catches gradual changes that ad hoc readings miss. Review consumption at consistent intervals, such as weekly or monthly, rather than only when something goes wrong.
- Investigate anomalies: Flags faults early, before they become costly. Unexpected spikes or drops often point to a leak or equipment left running outside normal hours.
- Compare similar areas: Surfaces inefficiency by contrast. A unit using noticeably more than a similar one nearby is often the clearest sign something needs investigating.
- Review out-of-hours consumption: Highlights waste that’s easy to miss. Usage that doesn’t drop off overnight or on weekends usually means equipment has been left running unnecessarily.
- Assess efficiency projects: Confirms whether a change actually worked. Compare before-and-after data rather than assuming new equipment or a process update delivered the expected reduction.
- Verify meter and data quality: Protects the accuracy of everything else on this list. Calibration drift or a connectivity fault can quietly skew figures for months if left unchecked.
- Assign ownership for acting on findings: Ensures the data actually gets used. Without someone responsible for reviewing it, even a well-designed system tends to go unused.
Commercial sub-metering FAQs
Our business energy experts answer commonly asked questions regarding sub-meters installed at business premises:
Can existing sub-meters be connected to a new monitoring system?
In most cases it is possible provided the existing meters are compatible with the new platform’s communication protocol and can output data in a format it can read.
Older or manually read meters may need additional hardware, such as a compatible data logger or gateway, to bridge them into an automated system.
Can electricity and gas sub-meters feed into the same dashboard?
Yes, and this aggregation is often the whole point of dashboards. Most sub-metering software is designed to handle multiple utilities within a single platform, allowing electricity, gas, and other sub-metered utilities such as water or heat to be viewed side by side rather than through separate systems.
How many sub-meters does a commercial building need?
There’s no fixed number, it depends on what the business needs to measure separately.
A single-tenant building with no internal recharging may need very few, or none, while a multi-let building or a site with several high-consuming processes may need one sub-meter for every circuit, unit, or piece of equipment that requires its own figure.
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