Utility meters are the backbone of energy management, but not all meters are created equal. While a main or master meter tracks total consumption for a building, a submeter breaks it down, providing granular insights into individual tenants, departments, production lines or equipment.

Without this level of detail, businesses struggle with cost allocation, efficiency, and sustainability compliance.

So, what’s the real difference between main meter and submeter? And where do smart meters fit into the equation? Whether you’re a property owner, facility manager, or business leader, understanding these distinctions is key to optimizing energy use, cutting costs, and ensuring fair billing.

Let’s break it down in this article:

Understanding main meters: The first step in energy monitoring

A main meter is the primary utility meter installed by a utility provider (or DGO) to measure total electricity, gas, or water consumption for a building or facility.

The utility company owns and manages the main meter and its data. The billing is based on the total recorded consumption:

• It aggregates all energy or water usage across the entire property.
• The property owner or business is charged a single utility bill, which must then be divided among tenants or departments.
• Utility companies use the main meter’s data for billing, grid management, and energy distribution.

While a main meter provides a broad measurement of usage, it does not differentiate between different users within the building. This often results in tenants or departments paying an estimated or equal share of costs, regardless of actual consumption.

That’s when a submeter comes in handy.

So, what exactly is a submeter?

A submeter is a secondary meter installed after the main meter to track utility usage at a more granular level.

Businesses and property owners install submeters to monitor consumption per tenant, department, equipment, production lines, etc.

Unlike main meters, submeters are privately owned and offer:

• Detailed consumption tracking for fair cost allocation.
• Transparency in utility billing, ensuring each tenant or department only pays for their actual usage.
• Operational insights, helping businesses and property managers identify inefficiencies, prevent waste, and optimize energy use.

Submetering is particular interesting for multi-tenant properties, industrial sites, and commercial buildings, ensuring fair and accurate cost distribution while improving cost control.

Curious to dive deeper into the topic? Check out our comprehensive guide explaining what a submeter is and how it works.

Master meter vs. Direct meter vs. Submeter: The differences

A master meter (= main meter), and a direct meter are sometimes confused. But they do serve different purposes.

• A main meter tracks the total utility consumption of a building and is owned by the utility provider. The property owner receives one bill for the entire property.
• A direct meter is also installed by the utility provider but is assigned to a single tenant, or unit. This allows tenants to be billed directly by the utility company.

If transparent, fair billing is the only goal, a building with direct meters for each unit doesn’t require submetering, as tenants are already billed individually.

However, when only a main meter exists in buildings, submetering becomes necessary for accurate billing and fair cost distribution.

While cost savings and control are key benefits, submetering offers so much more – especially when it comes to CSRD and ESG reporting. Having accurate, utility-specific data at your fingertips strengthens and eases compliance, transparency, and sustainability performance.

Discover its full impact in our article, going in depth about submetering and cost savings and linking it to sustainability and efficiency.

Master meters and submeters: when and why you need both

Many commercial, industrial, and multi-tenant residential buildings rely on a combination of a master meter and submeters because utility providers often don’t offer direct meters for every unit.

• Multi-tenant buildings: Offices, malls, and residential complexes often have one master meter but use submeters to fairly allocate costs among tenants.
• Factories & warehouses:  High-energy-consuming systems like HVAC, lighting, and production lines are submetered separately to track efficiency and reduce waste.
• Hotels & commercial spaces: Kitchens, laundry services, EV charging stations, and HVAC systems can all be submetered separately for cost tracking.

Without submeters, property owners must either estimate usage or split costs evenly, which can lead to disputes, inefficiencies, and hidden energy waste.

 

What about smart meters? How do they relate to a master meter or submeter?

Many businesses and property owners assume that smart meters and submeters serve the same purpose. While both improve energy monitoring, they are fundamentally different with different roles in utility management.

Smart meters primarily benefit utility providers, offering more accurate and automated consumption tracking.

Submeters, on the other hand, are installed by businesses and property owners to track energy use at a granular level, providing data-driven insights into tenant usage, equipment efficiency, and cost allocation.

Smart meters vs. master meters: What’s the upgrade?

Traditional main or master meters, installed by utility companies, provide monthly consumption readings. This provides a high-level overview of total building usage. While they ensure businesses and property owners receive an accurate bill, they lack real-time visibility into when and where energy is being used within a facility. This makes it difficult to detect inefficiencies, optimize operations, or allocate costs fairly.

By automating the data collection process, smart meters solve this issue to some extent. Unlike traditional meters that require manual readings, smart meters transmit usage data in real-time or at frequent intervals to the utility provider’s network. This upgrade improves billing accuracy, eliminates estimation errors, and allows businesses to track overall consumption more efficiently.

Additionally, smart meters enable remote monitoring, meaning businesses no longer need on-site staff to check the usage manually.

However, while smart meters improve data collection, they still lack the detail needed for very precise energy management at the tenant, department, or equipment level. And yes – you hear us coming: this is exactly where a submeter enters the arena!

Can a smart meter replace a submeter?

No, a smart meter cannot replace a submeter because they function at different levels within the energy management and energy monitoring.

A smart meter is an advanced version of a main meter. It measures total consumption in real time but doesn’t break it down by individual users or processes. However, a smart meter does support two-way communication with the utility provider, enabling remote readings and monitoring.

Since smart meters are owned and controlled by the utility provider, businesses have limited access to the raw data. They cannot freely analyze the information to track internal inefficiencies, tenant billing, or department-level usage patterns.

A submeter, on the other hand, allows businesses to divide their utility consumption among different users, whether it’s tenants, production lines, different sites, or specific equipment. Unlike a smart meter, which only provides aggregated data, submeters provide detailed, actionable data into energy distribution. This makes them essential for fair tenant billing, cost allocation, and operational efficiency.

Smart Meters track totals, submeters deliver the details

For example, in a multi-tenant building, a smart meter records the total energy usage. But it cannot determine how much each tenant is consuming.

This often leads to disputes, as businesses must either divide the bill equally, or estimate individual usage. A submeter solves this issue by measuring each tenant’s exact consumption, ensuring fair billing and accountability.

Similarly, in an industrial facility, a smart meter may show that energy costs are rising, but it won’t pinpoint whether the increase is due to an inefficient HVAC system, a failing compressor, or extended machinery runtime.

Only submeters offer this deep granular level, enabling facility managers to detect inefficiencies, optimize equipment schedules, and cut waste, all while providing real-time utility monitoring and data.

At nanoGrid, we offer a 360° approach to utility data: from installing and managing meters to delivering real-time data and automated ESG reporting.

Conclusion: Need accuracy? Go beyond the main meter

When it comes to utility tracking, one meter isn’t enough. A main meter tells you how much energy is used, but only a submeter reveals where, when, and by whom. It’s the difference between estimating and optimizing, between shared costs, correct data, efficiency and fair billing.

And while smart meters improve accuracy, they still lack the depth needed for internal cost control and energy efficiency gains. That’s where submetering becomes a game-changer, allowing businesses to track usage in real time, detect inefficiencies, and future-proof operations for ESG compliance.

The choice is clear: submetering isn’t an upgrade, it’s a necessity. The question is, how much data-driven visibility are you willing to sacrifice without it?

nanoGrid:  Real-time utility monitoring, anytime, anywhere

At nanoGrid, we specialize in real-time utility monitoring, providing Paneuropean businesses with full visibility into their energy consumption through the most accurate and reliable utility data.

Our technology tracks electricity, gas, water, and gasoil by the minute, securely storing data in the cloud and displaying real-time insights through the nanoGrid app, where users can analyze trends, compare locations, and export reports.

With intelligent alerts that detect anomalies and remote control capabilities, companies can prevent waste, reduce costs, and boost efficiency. All while making data-driven decisions that support both financial and sustainability goals.

Interested how we cover almost 100% of your utility data? Contact us and we’ll be in touch right away.