Submetering Heat with BTU/Flow/Energy Meters

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Submetering Heat with BTU/Flow/Energy Meters

Elliot B.
Rental Property Investor · Biddeford, ME · Member since 2017 · 37 posts · 14 votes

Hey all,

It's winter time and the oil is flowing. This gives me plenty of incentive to find a way to cut some of these heating expenses. Most of the time when the topic of submetering heat is brought up the consensus is to install one heating system per unit. This is expensive from an initial capital and maintenance standpoint and I've been on the hunt for a better way.

One option that I've found is installing BTU/Flow meters (Istec 4440) on the supply and return lines for each heating zone (one zone per unit). This will effectively measure the exact energy usage per unit. Several companies offer these meters in combination with a software platform for monitoring and billing. It is my understanding that the company works out the tenant billing rates based on your master utility bill to keep it consistent and fair.

So, the technology exists BUT is it legal in Maine to bill the tenants in this way? i.e. Measure usage with a BTU/Flow meter and bill them directly. Further, how can you enforce collections if you're not a utility? One suggestion I was given was to add a clause to your lease that payments are first applied to utilities then rent.

Is anyone in Maine / New England doing this type of submetering? Can anyone chime in on the billing/legality aspect?

Stay warm,

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Colleen F.Pro Member
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
7y

Ok, so maybe I am not getting it but I have a hot water boiler with separate zones for each unit. I hear people talking about air flow etc. I did not think we were talking about forced air.  I thought  @Elliot B. was talking about installing meters on the supply and return pipes for each unit and measuring BTUs there. As for heat loss along the way why does it matter? Aren't you  billing in proportion to use?    I think it works if you have 1 zone per unit. However how do you come up with the billing amount per BTU?

@Tyler Bushey nice try, those of us with oil are often a mile or miles from natural gas and propane is $$$ and even if you had gas if  you have one boiler it doesn't solve the problem. 

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  • Cody DeLong
    Gorham, ME · Member since 2018 · 280 posts · 186 votes
    7y

    This would be amazing!!  I'll keep an eye on this post as my property management and I have talked about this a few times and I'm really feeling the squeeze on my heat and oil this year on my 11 Unit.  Looking at other options as well.  I've tinkered with keeping the propane and oil as a backup but putting in heat pumps in each unit and then make my tenants pay their own electric.  My worry about this is that tenants will still have the heat up all the way in the apartment for the oil and I'd still be paying a **** ton for that.

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  • Elliot B.
    OP
    Rental Property Investor · Biddeford, ME · Member since 2017 · 37 posts · 14 votes
    7y

    @Cody DeLong yeah, I've considered the heat pump with oil backup option. You could lock the oil thermostats at like 50 for a baseline heat and let the tenants heat the rest of the way with their heat pumps.

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  • Cody DeLong
    Gorham, ME · Member since 2018 · 280 posts · 186 votes
    7y

    @Elliot B. That's not a bad idea.  My other issue I think of when it comes to that is I'm in the process of switching everyone over to non smoking.  My inherited tenants ALL SMOKE and none had security deposits.  I need to figure out if smoking will really **** with the heat pump and cost me more as people smoke.  It's going to be a bit before I can get rid of all of the inherited on the 11 unit.  I have had 2 turnovers so far but of course those were the 2 of 3 total that don't smoke.

    0Reply
  • Tyler Bushey
    Investor · Biddeford, ME · Member since 2017 · 282 posts · 180 votes
    7y

    Convert to natural gas with separate meters for each unit!

    0Reply
  • Elliot B.
    OP
    Rental Property Investor · Biddeford, ME · Member since 2017 · 37 posts · 14 votes
    7y

    @Tyler Bushey Care to elaborate on how you would achieve this with only one boiler? Which sensors / technology do you use for this?

    Do you mean separate meters on the street (provided by the utility) or separate meters as I've described in the building / on the piping?

    I don't really see a way to have separate utility meters with a single boiler since there is generally only a single gas inlet.

    0Reply
  • Brett Jones
    Investor · Ellsworth, ME · Member since 2016 · 51 posts · 26 votes
    7y

    I have a duplex that I originally intended to have serviced by individual heatings systems, but ended up installing a single system that's large enough to heat the whole building. One side is finished and has a long term tenant, however the other side is unfinished (other projects have taken priority). Given the single tenant, I haven't had to solve this problem, it is however on my mind. After speaking with my Plumbing/Heating guy he mentioned these meters and I was very interested at first, but was put off by just the price of the meters (MSRP of $800ish each). For my system I'd need meters for 2 zones and any controllers/monitors/etc plus installation. A second boiler would be $3500-$4000 installed. At this point I'm inclined to average fuel usage over the last few years and come up with a heat included number to add to the rent.

    0Reply
  • Jim Goebel
    Real Estate Investor · Des Moines, IA · Member since 2016 · 922 posts · 533 votes
    7y

    @Elliot B.

    I doubt a energy meter based on airflow, heat - etc - of any variety - would hold up if challenged in a court of law - 

    0Reply
  • Brett Jones
    Investor · Ellsworth, ME · Member since 2016 · 51 posts · 26 votes
    7y

    I should clarify. I would need 2 meters per unit, for a total of 4 ($3200 at full retail).

    0Reply
  • Tyler Bushey
    Investor · Biddeford, ME · Member since 2017 · 282 posts · 180 votes
    7y

    Separate meters on the street just like the electric!

    0Reply
  • Elliot B.
    OP
    Rental Property Investor · Biddeford, ME · Member since 2017 · 37 posts · 14 votes
    7y

    @Brett Jones yep they are expensive, especially at that scale but consider the maintenance costs of additional heating systems and how he numbers change with more units.

    @Jim Goebel That’s like saying science is fake. These meters and others like it are in use across the country for this very purpose. Do you mean that all submetering is illegal or only using certain meters? Are speaking specifically to Maine law?

    @Tyler Bushey Again, I don’t see how that is possible when you only have one heating system. Especially when the boiler only has one gas inlet... How do the meters know which unit is calling for heat?

    0Reply
  • Jeremy A.
    Rental Property Investor · ME · Member since 2018 · 179 posts · 59 votes
    7y

    go for it.

    https://inspectapedia.com/heat/BTU_Monitors.php

    1Reply
  • Elliot B.
    OP
    Rental Property Investor · Biddeford, ME · Member since 2017 · 37 posts · 14 votes
    7y

    @Jeremy A. thanks for the link. I think I might. Do you have experience with them?

    0Reply
  • Jeremy A.
    Rental Property Investor · ME · Member since 2018 · 179 posts · 59 votes
    7y


    Originally posted by @Elliot B.:

    @Jeremy A. thanks for the link. I think I might. Do you have experience with them?

     no. but im seriously looking into same thing.

    got 9 units i pay oil heat oil hot water for and its getting too expensive. this maybe my solution

    0Reply
  • Jim Goebel
    Real Estate Investor · Des Moines, IA · Member since 2016 · 922 posts · 533 votes
    7y

    @Elliot B.

    Hyperbole much there bud?

    Not quite. Please study engineering and you’ll have more of a grasp of why measuring amperes (electricity) or volume (water or natural gas) lends itself to reasonable precision.  I’m not trying to rain on anything here but the reality is that measuring Btus delivered to individual units via airflow is by its very nature imprecise - if you want to know why, read on...

    The size and length of the ductwork is but one factor ( of many) that will yield energy losses while that warm air is being moved to your units. While you may be able to measure energy to some precision that you are satisfied with close to the point of delivery - what you will have a very tough time accounting for how those losses are split amongst your units. Those losses can be substantial, by the way within an HVAC system-

    Again I doubt these technologies would hold up under scrutiny within a court of law because all it takes is one person with even a basic grasp of principles of engineering and you’d find an easy 10+% delta in these systems’ measuring abilities. Hardly ‘revenue grade’...

    1Reply
  • Elliot B.
    OP
    Rental Property Investor · Biddeford, ME · Member since 2017 · 37 posts · 14 votes
    7y

    @Jim Goebel I guess it comes down to legal precedent and the definition of revenue grade. Id be willing to guess that most meters would come under scrutiny.

    Btw this is a for hydronic heating systems so you have a closed loop. There are still variables due to heat loss along the way to the units but the medium (water) carrying the heat is guaranteed to flow to its destination (radiators). So by measuring the flow of the water and the temperature delta across the supply and return lines, you get an accurate usage figure.

    ✌️

    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    7y

    Ok, so maybe I am not getting it but I have a hot water boiler with separate zones for each unit. I hear people talking about air flow etc. I did not think we were talking about forced air.  I thought  @Elliot B. was talking about installing meters on the supply and return pipes for each unit and measuring BTUs there. As for heat loss along the way why does it matter? Aren't you  billing in proportion to use?    I think it works if you have 1 zone per unit. However how do you come up with the billing amount per BTU?

    @Tyler Bushey nice try, those of us with oil are often a mile or miles from natural gas and propane is $$$ and even if you had gas if  you have one boiler it doesn't solve the problem. 

    2Reply
  • Elliot B.
    OP
    Rental Property Investor · Biddeford, ME · Member since 2017 · 37 posts · 14 votes
    7y

    @Colleen F. You nailed it - I'm talking about hydronic heating systems. You *could* bill proportionately in more of a RUBS style with out meters. The heat loss isn't a huge deal but probably could get you in trouble if it went to court. For example, in my building the heating pipes for the second floor apartments probably run 30-40ft before entering those units. The heat lost along the way would still stay in the building but wouldn't go directly towards heating the units who are getting billed. The solution is to location the meters as close to the billed unit as possible (or even inside) but sometimes that's not convenient because the return and supply lines are on opposite sides of the building whereas you could easily put the meter right next to your boiler / zone valves where all of the pipes are easily accessible.

    As for cost per BTU, with oil, you keep a rolling average of the price per gallon in your tanks and divide the BTU's used by 138,500 (BTUs contained in a gallon of heating fuel). That will give you the total gallons used and you can bill accordingly. There are companies who provide this as a service.

    0Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y
    Originally posted by @Elliot B.:

    @Cody DeLong yeah, I've considered the heat pump with oil backup option. You could lock the oil thermostats at like 50 for a baseline heat and let the tenants heat the rest of the way with their heat pumps.

    I can beat that with some ice and a small fan 

    0Reply
  • Elliot B.
    OP
    Rental Property Investor · Biddeford, ME · Member since 2017 · 37 posts · 14 votes
    7y

    @Matthew Paul not if the oil tstat is located in the locked boiler room. You can trick your heatpump tstat all you want on your own dime 😁🥶

    0Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y
    Originally posted by @Elliot B.:

    @Matthew Paul not if the oil tstat is located in the locked boiler room. You can trick your heatpump tstat all you want on your own dime 😁🥶

    True , but boilers put off heat , if the Tstat is in the boiler room , the rest of the house would never see heat from the boiler anyway .

    0Reply
  • Jim Goebel
    Real Estate Investor · Des Moines, IA · Member since 2016 · 922 posts · 533 votes
    7y

    @Colleen F.

    @Elliot B.

    This will be my last post on this topic/subject.  A trained engineer could have some fun with this if something like this went to jury or if they were called in as a witness (kind of weird what engineers call fun for most people).  My opinion is that if people were making reasonable business calculations, these types of cases wouldn't even get there as the end result would be a judge having his eyes effectively glazed over and losing confidence in the efficacy of the sub metering solution.  I suspect this would happen if various parties were given the ability to ask questions in nearly every application for what this thread touches on - and I have major concerns about integrity (and credibility) issues involved in putting yourself in a position to defend this position if ever challenged.  I know very little about legal precedent but I'd expect the major meter manufactures (selling into the utility space) to be well incentived to challenge these items best they can, and they have money.

    Here are the issues, and the reasons that the difference between an air forced system and a boiler/hydronic system are not meaningful for this discussion (ie efficacy issues of sub metering exist for either when method of measurement is measuring heat at point of delivery):

    • In either case, the blower (or pump for a boiler) is the method of 'moving' either air (central air) or water/glycol or equivalent (boiler etc).  The amount of losses due to the ductwork (central air) or pipes (boiler etc) system are going to directly affect the amount of heat delivered in your different areas/zones.  This means, effectively that there is no 'fair' way to split up the cost of the energy delivered for the locomotive method of 'moving' that air or water/glycol mix.
    • The other main hurdle here is that heat losses as the air or water/glycol etc mix is traveling are significant.  These losses depend on the layout and geometry of the system (ductwork, piping, etc) and the insulation used, the ambient temperature that these ducts/pipes are traveling through, the temperature of the air or water/glycol mix etc...  This would be quite the analytical marvel to even effectively ESTIMATE this with any reasonable level of certainty/confidence (even for someone appropriately trained).  The main reason/difference between this and the delivery of electrical energy is that the losses of transmission of electrical energy are generally less than 1-2% (that's why we use electrical transmission methods over long distances, generally speaking).  We can transmit electricity reasonably efficiently, and then we can transport actual material (ie: water or natural gas) reasonably efficiently.  As soon as that natural gas is converted into heat, the ability to efficiently transmit that over distance is VERY limited.  You touched on something else important Elliot which is that some of those 'losses' in heat affect/warm areas of a multi-unit in ways that could vary significantly from one building layout, climate, etc to another.

    ...............................................................................................................................................................................

    This is a real estate investment forum so the main audience here are investors, not engineers.  

    That said, we have this exact application that we have looked at/evaluated with one of our properties (duplex) that has separately metered electrical but one central air unit.  We have made the decision to list the place for rent and then simply communicate the situation with the tenant.  They are paying slightly more in rent that is in line with what we believe might be a reasonable debit if they paid the utility bills.

    I won't go so far as to say this is the best decision for everyone in this type of scenario, because there may be things I do not know.  I will go so far to say that the sub-metering was the WRONG choice for us, given the cost, and given that if push came to shove, it would not hold up under scrutiny - by tenants, in a court of law - and therefore by extension, us.

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  • Elliot B.
    OP
    Rental Property Investor · Biddeford, ME · Member since 2017 · 37 posts · 14 votes
    7y

    @Jim Goebel

    Thanks for taking the time for the thoughtful response.

    I think that if one were to submeter, the fairest/most accurate way to do so would be placing the sensors/meters IN the units. That way you can confidently say that all heat that gets clocked on the meter has reached the living space of the individual footing the bill. Any losses incurred along the way are chalked up as inefficiencies / common area heating costs.

    Whether this is a good idea, IMO, is based on markets trends. If no other landlords in the area charge for heat, you'll probably have a tough time. However, there is a nice marketing aspect to "only pay for what you use" because if there are heavy utility users in a building, it essentially gets subsidized by all residents over time.

    I'm lining up some meters for testing and will report back on any findings.

    0Reply
  • Jeremy Bloom
    Member since 2018 · 20 posts · 13 votes
    6y

    I am pondering all of this for my 4 unit and I really appreciate all of the angles here. 

    I pay for the oil heat and do not plan to change that in the next 5 years at least. And in Maine if we pay for heat we have to keep it at 69 or 70 I forget, and I think 71 or 72 for elderly.

    My big issue is rags on the thermostat which beats every single thermostat anyone has shown me. You have to do something more than a landlord thermostat. Here's my thought...

    I've decided to try the Next thermostat and flow meter to essentially monitor temperature and flow and have record of the usage and estimated BTU usage. If an apartment shows high flow but low temperature, something is off. Then I get to say "you are abusing the heat. stop or 30 days get out". A chance to manage the situation, even if a hassle.

    This does also get you in position for monitoring serious pieces of your building's infrastructure. If you don't live there this is important for everyone and good investment if you ask me.

    I have to think a court would listen to some reason over the data. And I feel ok about telling a renter not to abuse free heat. And I feel ok about giving people 71-75 in 30 degrees.

    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    6y

    @Jeremy Bloom  the rag on the thermostat can be beat by placing a remote thermostat that is set to the legally required temperature with that remote thermostat actually controlling the temperature. I don't do this but know those who do.  That said the biggest issue with heat provided is not the thermostat but the open window in spring and fall when the heat is on. Leaving AC units in all winter etc.  

    0Reply
  • Eileen McCue
    Rental Property Investor · ME · Member since 2018 · 26 posts · 15 votes
    6y

    I am in the process of purchasing a 6-unit and am dealing with that same question of how to reduce heating costs, as the oil bill is by far the largest expense.  I had thought about some type of sub-metering solution as well, but it seems like there is really no good way to do that.

    Our other buildings are duplexes where it was relatively easy/made sense to separate the heating systems. One already had electric heat in the upstairs unit and the other duplex needed a new boiler when we purchased it anyway, so we installed a new propane boiler for heat/hot water in the large unit and a couple Rinnais in the 1-bed unit. A bit pricey up front, but we are long term buy and hold investors, so the savings on paying for tenant heat makes sense.

    In the 6-unit our initial thought was to install electric heat in the units, but that can be a hard sell in Maine even though I am not convinced that electric heat is necessarily more expensive than other options (we even did a comparison last winter in our 2-unit where one is on a propane boiler w/ HWBB and the other electric, and it was about the same cost per month).  There is definitely a stigma about electric heat.

    So, our current thinking, rather than spend the money on electric heating units, or individual Rinnai's for each unit, is to look at energy savings and heat loss.  Efficiency Maine has programs that offer rebates for multifamily upgrades: https://www.efficiencymaine.com/at-work/multifamily/ . We've had an energy audit (https://www.efficiencymaine.com/at-home/energy-audit/) done at one of our duplexes and spent about $5500 on insulation which made a huge difference in the heat loss for the whole building.  We have also done window replacements and replaced analog thermostats with programmable digital thermostats.

    Interested to hear if anyone else has had success with weatherization/insulating and other energy efficiency measures.

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