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Shadow Metering for Real Estate Sustainability: Everything You Need to Know

If you’re a sustainability professional in real estate, chances are you’ve heard a certain term crop up with increasing frequency in recent months: shadow metering. 

Shadow metering has emerged as an undeniably hot topic in real estate, and for good reason. Traditional methods of acquiring and interpreting energy data (such as collecting utility bills) can be riddled with complexity, errors, and obstacles, particularly where triple-net assets are concerned. 

Herein lies the allure of shadow metering as an alternative data capture strategy. Shadow metering has wide applicability, cutting across asset types and lease structures, and harnesses the power of automation to extract real-time energy data from buildings. This data, rich in accuracy and insight, can play a pivotal role in fueling a wide range of sustainability initiatives, from ESG reporting to benchmarking compliance to energy optimization programs. 

In this article, we’ll cover the ins and outs of shadow metering as an energy data acquisition strategy and share pros, cons, and practical considerations to take into account. 

What is shadow metering? 

Shadow metering is a data capture approach that enables landlords to monitor and report energy consumption without needing to access tenant-owned bills or equipment. It involves installing an additional meter (or meters) to track real-time energy consumption, either for the whole building or within specific spaces. The meter is installed in parallel with the main utility meter, often by connecting  to the utility’s current transformers (CTs), hence the term “shadow metering.”  

Due to its broad applicability, shadow metering is an excellent option for capturing and managing energy data across a portfolio, especially from triple-net assets where other data acquisition methods may be less feasible. It also guarantees ongoing access to automated, high-quality data; while managing bill data across a portfolio can be labor-intensive, error-prone, and subject to restrictions, shadow metering will deliver a steady stream of automated real-time data that can be used for ESG reporting, benchmarking compliance, and energy and carbon management programs alike. 

Shadow metering has numerous benefits relative to other common energy data capture approaches, including: 

  1. Ensuring ongoing data access – after installation, shadow meters will continuously transmit live energy consumption data. Additionally, landlords will not need to run a new LOA process upon tenant move in/out.

  2. Highlighting building sustainability – as smart, landlord-owned equipment designed to enable ongoing energy data capture and management, with an ultimate eye towards reducing energy, emissions, and operating expenses, shadow meters are sustainable infrastructure that can help showcase the environmental responsibility and perceived value of a building.

  3. Facilitating the identification of energy savings opportunities and supporting project measurement and verification. By comparing building load curves before and after efficiency projects are implemented, owners can determine if optimizations and upgrades are having the desired effect and adjust the approach if necessary. And as the regulatory environment shifts from coverage and reporting to performance and improvement, having a strong foundation of real-time energy data ensures stakeholders at all levels of a real estate organization can find and take advantage of savings opportunities, respond quickly to potential issues, maintain optimal performance, and report impact accurately to investors and other stakeholders.

  4. Allocating Scope 1, 2 and 3 emissions as is applicable for a building’s spaces and utility types, rather than relying on estimations based on floor area. Installing multiple shadow meters (i.e. submetering) can help owners separate landlord and tenant loads and calculate associated emissions with a high degree of accuracy, a requirement for corporate carbon accounting and compliance.

  5. Delivering high-quality, accurate data that meets third party verification standards – energy data collected with shadow meters that is then converted into emissions data has the highest data quality score, per the latest guidance from GREB, PCAF, and CRREM.

  6. Facilitating accurate modeling when assessing onsite solar projects - real-time data delivered through shadow metering can help sustainability teams qualify buildings for onsite solar deployments by forecasting energy usage and spend before and after a potential solar deployment. It can also enable accurate ROI calculations after a solar installation, supporting vendor management and subsequent project negotiations. 

Interested in shadow metering for energy data capture, ESG reporting, sustainability project management, or Scope 1/2/3 allocation? Aquicore can help! Learn more and get in touch with us here.

How does shadow metering work? 

As noted above, shadow metering entails installing an additional building meter (or meters). This installation process is a key component in enabling the accurate and continuous monitoring of energy usage to support sustainability initiatives. A typical installation process may run as follows: 

1. Conduct a Site Assessment 

Before installing one or more shadow meters, it is essential to conduct a thorough assessment of the building's layout, equipment, and infrastructure. This assessment helps determine the optimal locations for meter installation. At minimum, the location should allow for comprehensive whole-building data capture while considering factors such as the placement of existing utility meters, tenant spaces, and areas with varying energy demands.

2. Select Meters 

The next step is to determine the appropriate type and number of shadow meters for the building's specific requirements. Depending on site complexity and the level of data granularity desired, an owner might choose to install a shadow meter for the entire building, or deploy submetering to track energy consumption in individual spaces or tenant areas (e.g. for accurate Scope allocation as described above). In addition to facilitating carbon accounting, submetering can also provide more detailed insights into energy usage and allow for precise allocation of energy costs (e.g. to bill back tenants).

3. Coordinate with Utility Providers as Needed: 

After conducting a site assessment, it is important to coordinate with applicable utility providers to ensure a smooth installation process. The shadow meters often connect to the utility company's CTs to measure and record energy consumption in parallel with the main utility meters. Working closely with utility providers will help ensure that the installation is compliant with regulations and relevant technical specifications.

4. Install Meters 

The physical installation of shadow meters involves connecting the meters to the appropriate points in the electrical system, often near the main utility meters. This can involve wiring and electrical work, which should be carried out by qualified professionals to ensure safety and accurate configuration. 

5. Calibrate, Test, and Commission 

After installation, it's crucial to calibrate and test the shadow meters to ensure they are accurately measuring energy consumption. Commissioning should involve comparing the readings from the shadow meters with those from the main utility meters to validate their accuracy and recording the results. 

6. Integrate and Monitor Data with Software

Shadow meters are equipped with sensors and communication capabilities to transmit real-time energy consumption data. This data can be integrated into energy and sustainability management platforms, allowing sustainability and property-level teams to monitor energy usage trends, identify anomalies, and make informed decisions to optimize efficiency. Additionally, many cloud-based platforms (like Aquicore) include automated alerting capabilities to proactively flag data quality issues and potential outages, ensuring your data remains in tip-top shape. 

Is shadow metering permitted under triple-net leases, where tenants own their utility data? 

Shadow metering is frequently authorized under most leases, including – importantly – triple-net leases. This occurs through provisions relating to site access, equipment ownership, and affordances made to the landlord to satisfy investor needs and other reporting requirements. That said, every lease is different, and it is always advisable to review lease language carefully and coordinate with your legal team when there are questions. It is also best practice to engage tenants with your sustainability program by openly communicating the mutual benefits of energy data capture for reporting, compliance, and ongoing optimizations that reduce spend and emissions and improve building sustainability. 

Is shadow metering more expensive than other data capture methods? 

Shadow metering involves upfront equipment and installation costs which can vary depending on the building, region, and utility provider. However, as you consider a data capture strategy across your portfolio, it is important to evaluate one-time installation costs against the ongoing costs associated with other methods, which may come in the form of time spent on manual processes (including data collection, management, analysis, and validation), additional headcount, consultants and third parties, and incurred energy costs from missed issues and opportunities. Weighed against the lifetime of the equipment, the high-quality energy data that it will continue to deliver in support of ongoing energy optimization and sustainability initiatives and regulatory compliance, and the related risk that is mitigated by guaranteed energy data access, shadow metering emerges as a cost-effective and efficient data strategy relative to other options. 

Final Thoughts 

Installing shadow meters is a savvy and proactive step towards data-driven energy management and sustainability. By capturing real-time energy consumption data through shadow meters, sustainability teams, property managers and building engineers alike can make informed decisions that reduce energy and emissions, lower costs, meet regulatory requirements, enhance tenant comfort, and demonstrate a commitment to environmental responsibility