UK Multi-Tenant Commercial Solar Sub-Metering: A Guide

Key Takeaways

• Electricity meters used for billing in UK commercial multi-tenant buildings must be "appropriate" and often certified to specific standards, including the Measuring Instruments Regulations 2016 (MID).
• Property owners supplying solar electricity to tenants may be exempt from needing an electricity supply licence if they meet specific conditions related to generation capacity and supply volume.
• While Ofgem sets a maximum resale price for domestic consumers, commercial arrangements allow for additional charges for meter readings and invoicing.
• Intentional interference with a meter or supplying electricity without a licence are serious offences, subject to fines.

Understanding Sub-Metering for Commercial Solar in the UK

Sub-metering in a multi-tenant commercial building with solar panels allows the building owner to accurately measure and bill individual tenants for their electricity consumption, including power generated on-site. This system also enables the allocation of solar energy to common parts of the building, such as hallways, lifts, and shared facilities. The process ensures fair billing and compliance with UK electricity regulations.

The legal framework for electricity supply in the UK requires that electricity be supplied through an "appropriate meter" for charging purposes. This applies whether the electricity comes from the national grid or an on-site solar installation. For commercial settings, this means ensuring that the sub-meters are legally compliant for billing.

The Role of MID-Approved Meters

For any electricity meter used for trade, including sub-meters for billing tenants, specific regulations apply in the UK. The Measuring Instruments Regulations 2016 are particularly relevant, as they apply to "active electrical energy meters" intended for "use for trade". These regulations implement the European Measuring Instruments Directive (MID) in the UK, ensuring meters meet stringent accuracy and reliability standards.

An "appropriate meter" for ascertaining the quantity of electricity supplied must be of an "approved pattern or construction", installed in an "approved manner", and "certified". This certification confirms the meter's accuracy and suitability for billing. A meter examiner, appointed by the Director, is responsible for examining, testing, and certifying meters. They also determine if a meter is in "proper order" and operating within "prescribed standards", including specified margins of error.

Metering Requirements

Navigating Electricity Supply and Resale Rules

When a commercial building owner generates solar electricity and supplies it to tenants, they are effectively reselling electricity. While Ofgem's Maximum Resale Price Direction primarily addresses domestic consumers, stating that the resale price should be the "same price as paid by reseller, including standing charges", it sets a precedent for fair pricing.

For commercial arrangements, additional fees can be charged. Ofgem guidance notes that "additional fees can be charged for meter readings and invoicing on top of energy costs". This allows building owners to recover administrative costs associated with managing the sub-metering system and billing tenants.

It is important to note that generating, transmitting, distributing, or supplying electricity without a licence is an offence under the Electricity Act 1989, Section 4, unless specific exemptions apply.

You can learn more about these rules in our guide to UK electricity resale rules.

Licensing Exemptions for On-Site Generation and Supply

Many multi-tenant commercial solar installations can operate without requiring a full electricity generation or supply licence, thanks to various class exemptions. These exemptions are crucial for enabling on-site renewable energy projects.

Generation Exemptions (Class A: Small Generators)

• Up to 10 megawatts: You are exempt from a generation licence if your generating station produces up to 10 megawatts.
• Up to 50 megawatts: An exemption also applies for generating stations up to 50 megawatts, provided their declared net capacity is less than 100 megawatts.

Supply Exemptions (Class C: On-site Supply)

For supplying electricity to tenants on the same site, several Class C exemptions may apply:

• Single Consumer: If you supply electricity generated yourself, or generated plus supplied by a licensed supplier, to "one consumer on same site, consuming all electricity provided" (excluding Class B resale).
• Qualifying Group: If you supply to "two or more consumers forming a qualifying group on same site, consuming all electricity provided" (excluding Class B resale).
• Additional Group Consumers: If you supply to "one or more consumers on same site or via private wires", where the "total maximum amount of electrical power supplied to additional group consumers is 100 megawatts", and "not more than one megawatt to domestic consumers".

There are also Class B exemptions for resale, which apply if the electricity is "supplied by a licensed supplier or Class C supplier". Conditions for Class B resale include supplying "not more than 10% of Class C electricity supplied to relevant premises in previous year" and "not more than 250 megawatt hours to domestic consumers in any year".

Understanding these exemptions is vital. You can find more detailed information in our guide on UK electricity supply licensing exemptions.

Allocating Solar Energy to Tenants and Common Parts

Effective allocation of solar energy to tenants and common parts relies on accurate sub-metering and a clear understanding of the regulatory framework. The building owner, as the supplier of the solar electricity, must ensure that all meters used for billing are compliant with the Measuring Instruments Regulations 2016 and are certified.

The process involves:

1. Meter Provision: The meter may be provided by the customer if the authorised supplier agrees; otherwise, it is provided by the authorised supplier.
2. Meter Installation: Meters should be installed on the customer's premises in a position determined by the authorised supplier, unless it is more reasonable elsewhere.
3. Billing: Based on the readings from the certified sub-meters, tenants can be billed for their consumption of solar electricity. The charges can include the energy cost and additional fees for meter readings and invoicing.

For common parts, a dedicated meter can track consumption, allowing the cost to be distributed among tenants as part of service charges, or covered by the building owner.

Common Metering Issues and Compliance Faults

Non-compliance with metering regulations can lead to significant issues, including legal penalties and disputes with tenants. It is crucial to ensure all sub-metering systems meet the required standards.

Faults and Consequences

What you can check yourself, and what you cannot

As a building owner, you can regularly check meter readings, monitor consumption patterns, and ensure the physical security of the meters. You can also ensure that your billing practices align with the agreed terms with your tenants and any applicable Ofgem guidance on resale.

However, you cannot:

• Certify meters: Meter certification must be performed by a meter examiner or authorised person.
• Alter meters: Intentionally altering a meter's register or preventing it from registering is an offence.
• Remove or alter meters during a dispute: This requires approval and supervision from a meter examiner.

Installation, maintenance, and certification of electricity meters are specialist tasks that must be carried out by qualified professionals to ensure compliance and accuracy.

For more information on general metering requirements, refer to our guide on UK electricity metering regulations.

What the published sources do not tell you

While the regulatory framework provides a foundation, specific guidance for multi-tenant commercial solar installations in the UK remains less detailed in public sources. There is a gap in explicit guidance or exemptions that directly address the allocation of self-generated solar electricity to individual tenants and common parts, beyond general resale rules.

Detailed requirements for the type and placement of sub-meters in this specific context, ensuring full compliance with MID or equivalent UK standards for billing, are not always clearly outlined. Similarly, clarification on how "common parts supply" is treated under existing electricity supply and resale regulations, particularly when sourced from on-site solar generation, is limited.

Information on specific mechanisms or best practices for tenant energy allocation from a shared solar array, including legal frameworks for billing and dispute resolution in this specific scenario, is also not readily available. There is a lack of specific Ofgem guidance or industry codes of practice tailored to commercial multi-tenant properties with on-site solar generation and private sub-metering arrangements. The process for obtaining MID approval for sub-meters used in private networks for solar energy allocation, including any specific UK-accredited bodies or procedures, is not extensively detailed in public documents. Case studies or examples of successful implementation are also scarce.