Submetering for commercial customers – why not? A consumption-dependent heating cost bill is long since standard – for private households. But with commercial properties, it is quite different. Jürgen Bartz, Head of the newly established Center Commercial Customers at ista, explains why that is the case and what a possible solution could be.
Mr Bartz, where did the idea of offering submetering for commercial properties in Germany come from?
We have found that it is difficult for many property managers or owners of large commercial properties to prepare an accurate energy cost bill. This is because of the frequently very complex structure and highly dynamic usage profile of properties such as shopping centres, railway stations or airports with their spacious rows of shops. Consumption-dependent billing can ensure greater transparency and legal soundness.
Why, then, is consumption-dependent billing used so rarely?
In older buildings, the necessary documentation on the exact location of the pipes is missing. Moreover, suitable metering equipment cannot be installed in the building without qualified tradesmen. Furthermore, the constant structural changes within the building always have to be taken into account. At the same time, there is no economic incentive for the planners to go to the extra trouble. That’s why energy costs for commercial properties are often charged to the tenants on the basis of the floor area leased.
Our aim is to also introduce this form of billing in commercial properties as simply and efficiently as possible.
Why are you critical of allocating costs on the basis of floor area?
First of all, the tenant’s individual consumption is completely disregarded. There is no difference between a tenant who uses a lot of energy and another who saves energy and therefore the costs are not allocated fairly to the tenants. What’s more, since no metering equipment is installed, any potential for saving energy in the properties remains undiscovered.
How can things be improved?
Our concept for commercial properties is based on the consumption-dependent heating cost bill, which has been successfully used in the residential sector. Our aim is to also introduce this form of billing in commercial properties as simply and efficiently as possible.
How do you transfer this approach to the much more complex commercial buildings?
With an all-round, customer-friendly service which makes it possible to bill all water, heat and cooling energy used in a building in a transparent way and still react flexibly to structural changes within a building. To do this, we have developed a unique metering concept which exactly reproduces the infrastructure of the building, thus creating the basis for consumption-dependent energy cost billing. Our time-tested radio technology is used to read consumption so there is no need to make on-site meter-reading appointments. Then the invoice is prepared by our team of experts as part of a continuous service.
In 2014, DB Station & Service AG asked us to prepare a commercial concept for a large German main railway station – sales area of 7,000 m², divided into 53 shop units.
How does the concept for commercial properties work in practice?
Let me give an example: In December 2014, DB Station & Service AG asked us to prepare a commercial concept for a large German main railway station. The station has a sales area of 7,000 m², divided into 53 shop units. The complex building technology and the continual conversion work made it difficult for the customer to keep track of all the changes. As a result, DB Station & Service AG had to pay a large percentage of the annual fuel costs itself as consumption could not be reliably allocated to the respective tenants.
An analysis of the property revealed over 200 energy meters which were noted and documented. The analysis further showed that various underground heat pipes were not insulated at all, which meant a considerable, previously unnoticed loss of heat. On the basis of these new findings, we developed a metering concept, which will be implemented from January 2016. This concept not only makes it possible to bill all energy costs incurred in future but also reliably identify potential energy savings.
Moving on to the costs: What costs must the owners and property managers be prepared for?
As we primarily do not install any new systems but merely add to and coordinate the existing metering system, the costs do vary, depending on the complexity of the property, but remain manageable at all times. After establishing the basic building data, we first of all give a cost estimate for the property analysis. Only at that point does the owner or property manager decide if he wants to take advantage of our service or not. In most cases, he opts for our service as experience shows that the cost of the new commercial concept is already recouped in the first year, but at the latest in the second year.
What has been the industry’s reaction to the commercial concept so far?
The reaction has been extremely positive and consequently demand has been high. We are already looking after roughly 900 complex commercial properties. A large number of property analyses have been completed; over 50 more are being implemented. This shows that we are at the right place at the right time with our commercial concept.
At the moment you are only offering the concept in Germany – will you be rolling it out in other countries as well?
The concept can definitely be adapted for international use. And the need for this concept in other countries is, in some cases, much greater than in Germany as there are sometimes no construction plans or drawings showing the location of pipes at all. Some of our current customers in Germany are also international companies – so the step abroad is no longer all that big.
Thank you for the interview, Mr Bartz!