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Energy & Sustainability

How Will Real-Time Data Change the Way We Consume Energy at Work?

Logan Soya

Founder & CEO, Aquicore

Before occupying a new office space, companies often invest in improvements to make it their own. Whether it’s repainting, buying new furniture, or tearing down walls, office space rarely remains the same when tenants turn over.

The last time your company moved, what did they invest in? Did they consider energy-efficient light bulbs? Did they install motion sensors to turn off lights when the space is unoccupied? Many companies don’t yet consider energy efficiency when they’re renovating a space—but whether or not they do depends somewhat on their leasing structure.

And as it turns out, leasing structures play a big role in encouraging companies to use data to go green.

Leasing Structures Influence Tenant Behavior

In a full-gross leasing structure, where tenants’ utilities are included in their monthly rent payments, the landlord assumes the risk of paying for a company’s excess energy consumption. Tenants are likely to overuse energy because they are paying the same amount no matter what they use. As a result,, owners and landlords have been shying away from full-gross leasing structures, in order to pass off some of the risk to their tenants.

With triple-net leases, tenants pay for their specific energy consumption, which is calculated by submeters collecting data about their space. This moves the risk of paying for unexpected consumption to the tenants—but it also gives tenants control over their spending, motivating them to take action to reduce waste. Studies have been showing that tenants consume up to 30 percent less when they pay for their own utilities. Since triple-net leases have a positive impact on both tenants and landlords, they actually have a chance to become a dominant industry trend. Tenants are the most important players in the energy saving game, so landlords should do everything they can to engage them with transparency.

Submetering is the Key to Energy Transparency for Tenants

In order to successfully implement a triple-net lease, building owners and landlords must install submeters. Fortunately, submetering technologies have become cheaper, easier and more feasible to implement. This allows tenants to be billed exactly for their consumption.

Because of web-enabled meters, the data from submeters can be sent to the cloud, and tenant-billing software can automate invoice generation for every submeter in the building. That way, even if half of the tenants in a building have full-gross leases, while the other half have triple-net leases, it’s no extra hassle for building managers to bill all of the different tenants each month.

Online Portals Allow Tenants to View Their Real-Time Energy Data

Triple-net leases prompt tenants to take action, rather than passively overuse energy. When individual employees turn off their office lights, or when they unplug their chargers and computers during a business trip, employers will see their bills change—and they may take action to try to reduce them. Submetered tenants may be more likely to make energy efficiency investments in their space, since they will see the return on investment reflected in their bills.

Moreover, online portals allow tenants to track their energy data in real-time, to see exactly how and when they are consuming the most. New technology that makes this possible motivates tenants to monitor their performance, so they can reduce their bills and prove that they are industry leaders when it comes to sustainable business practices.

This Technology Doesn’t Just Benefit Tenants

It’s not only the tenants who benefit from lower bills. Landlords and building owners benefit from (1) equipment that lasts longer, because it is treated with more care, (2) more marketable buildings with better energy-efficiency ratings and Energy Star Scores, and (3) increased tenant satisfaction and retention.

Data-driven operations are becoming common practice in every industry. Giving tenants the transparency they need to effectively change their energy bills will motivate them to actively reduce their energy waste. To begin that movement toward smarter cities, we need to make sure the most important influencers—the tenants—are involved, and to do that we must provide them with actionable data.

Logan Soya

Founder & CEO, Aquicore

Logan Soya founded Aquicore in 2013 to bring his expertise in data collection and analysis into the commercial building industry. Aquicore now works with leading commercial real estate companies such…