Shop Talk: Submetering HVAC Expenses

Hi, I’m Connor Gray, Project Engineer and resident tech nerd here at Aquicore. Today, I’m kicking off our new series of technical blog posts about all things Energy Efficiency and Internet of Things.

For my first post, we’re diving into the world of BTU meters and HVAC tenant billing. It’s a subject I’m passionate about, and it gives my wife a break from hearing about it night after night. She thanks you in advance.

What’s so complicated about HVAC submetering?

HVAC billing presents a surprisingly difficult problem for multi-tenant spaces. Billing tenants for water, electricity, and natural gas consumption is usually straight forward and simple; slap on some submeters and away you go. By contrast, HVAC charges can be a nightmare for property management teams to manage. How do you accurately calculate an individual tenant’s use of a shared piece of equipment? How do you account for common spaces, occupancy, or changing HVAC equipment?

Compounding the problem, in most cases, the people responsible for tenant billing aren’t working directly with the HVAC equipment. HVAC equipment configurations can be extremely complicated, encompassing multiple pieces of equipment, and it isn’t a stretch to say that a conceptual understanding of the equipment isn’t necessarily being passed from engineering to the front office.

Until recently, there hasn’t been a cost effective way to measure individual tenant HVAC consumption, leading property management teams to make questionable calculations and leaving tenants with questionable bills.

Calculating tenant “Load Factors” to determine each tenant’s HVAC usage is a common method of estimation, but a flawed one. Load factors generate a static number that is used to calculate a tenant’s share of the total monthly use based on several contributing factors.

This method is crudely effective, but it doesn’t account for the fact that most of the criteria used for load factor calculations change day to day. Occupancy, the weather, and internal heat loads, like the heat given off by cooking or office equipment, can all vary daily or even hourly. Worse still, the original load factor calculation may have been estimated incorrectly, creating years of inaccurate billing. These factors, particularly in conjunction with HVAC equipment that’s not properly submetered for electricity, are a recipe for disastrous billing.

So, how do you do better HVAC billing?

The modern answer to the inherent issues with HVAC billing is to use BTU meters. BTU meters aren’t new, but advancements in technology are driving down the cost of these meters and helping to justify this use case.

Never heard of BTU Meters? You’re not alone. Fair warning: I’m about to nerd out hard about energy calculations and BTU meters.

BTU meters consist of a flow meter and two temperature sensors. The flow meter determines the volumetric flow rate of the working substance through the tenant’s supply pipes. Meanwhile, the temperature sensors measure the working substance’s return and supply temperatures. The specific heat and the density are constants based on the working substance of the system.

To calculate the total heat exchange being used to heat or cool a tenant’s space, you need to know a few more variables. Flow rate, density of the working substance, specific heat of the working substance, and temperature of the return and supply are all important factors.  Equipped with this data, the energy that is consumed in the heat exchange process can be calculated with the following formula:



  • Q = Heat Exchange
  • V = Volume
  • Cp = Specific Heat
  • ρ = Density
  • Tsupply = Incoming temperature of the working substance
  • Treturn = Outgoing temperature of the working substance


Simple diagram of a BTU meter in action


BTU meters are the only way to measure the actual amount of energy that is used to heat or cool a tenant’s space and to fully (and fairly) recover HVAC costs. With proper installation and commissioning, real-time BTU monitoring removes the ambiguity from HVAC tenant billing scenarios and helps you to obtain a better understanding of your HVAC system and energy use.

These insights can help you to ensure that the rest of your tenants aren’t stuck subsidizing that one tenant who insists on maintaining an arctic wonderland and to better understand the specific needs of your community.

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