Front of the Meter vs. Behind the Meter: What Does It Mean?
Energy is everything, and for thriving businesses, understanding the value of on-site energy production versus reliance on the grid guides immediate and long-term investment. Today, an increasing number of northern Michigan businesses are prioritizing behind-the-meter energy production to reduce exposure to energy volatility, protect margins, and make smarter investments in their facilities.
Behind-the-Meter vs. Front-of-the-Meter
The key differences between behind-the-meter (BTM) and front-of-the-meter (FTM) are location, purpose, and who each model benefits.
What Does Behind-the-Meter Mean?
Behind-the-meter refers to energy production capacity on-site. The term is derived from the energy flow’s position; it never passes through the electrical meter. Most BTM energy systems provide electricity for homes or businesses on-site to meet all the building’s needs or to supplement grid energy.
Traits of BTM:
Location: Energy generation equipment installed on a residential or commercial property.
Purpose: Lowers electricity bills, reduces reliance on the grid, provides back-up power, and allows for power shedding flexibility.
Examples of BTM electricity include rooftop solar, microgrids, and on-site energy storage.
What Does Front-of-the-Meter Mean?
Front-of-the-meter, or FTM, encompasses all electricity produced off-site that passes through a power meter.
Location: In most cases, FTM electricity is generated at local power plants by a variety of sources, including fossil-fuel power plants, grid-scale wind and solar farms, and utility-scale energy storage facilities.
Purpose: Grid-scale electricity production is designed to provide a stable supply of electricity, manage supply and demand, and integrate multiple energy sources.
Examples of FTM electricity in Michigan include large-scale solar projects such as the 45th Parallel Solar Project and Northern Waters Solar Park, as well as massive installations like the Big Mitten Energy Center and Monroe I Energy Center.
Front-of-meter electricity production is heavily dependent on legacy facilities burning natural gas. In Michigan, 65.7% of all electricity is from natural gas, coal, or petroleum, slightly above the national average of 56% to 60%. Non-renewable energy accounts for roughly 2,508 billion kWh of the 4,108 billion kWh consumed. Renewable energy accounts for 22-24% of the nation’s electricity supply, while nuclear power generates roughly 18% of the nation’s electricity.
Examples of BTM Energy – Storage, Generation and More
Behind-the-meter energy systems include several variations and combinations beyond generation. Many facilities pair one or more electricity-generating methods, such as wind or solar, with on-site energy storage.
Behind-the-Meter Energy Storage
On-site energy storage is crucial to commercial BTM systems. Facility-scale battery storage offers businesses the flexibility to lower costs by utilizing stored energy when electricity rates are highest. Storage reduces overall expenses and reliance on the grid and emergency power in the event of loss incidents such as natural disasters or fires.
Commercial and Industrial storage systems (C&I) are often used for “load shedding” or “peak shaving”, the practice of using stored electricity when demand spikes to reduce utility demand charges. They’re also a reserve of electricity in case of power outages or to augment daily operations when energy costs are higher than normal.
On-site Power Generation
BTM includes all on-site types of power generation. In most contexts, the term is used for renewable energy generation, including the most common BTM type, solar. It’s important to note that on-site generation is closely tied to storage. 80% of residential solar power systems include storage, and 40% of commercial systems combine solar with storage.
Behind-the-meter energy generation includes:
Solar
Wind
Hydropower
Biomass
Gas or diesel
BTM Microgrids
Microgrids are scaled-down versions of a power grid that often power entire cities. Instead, microgrids power specific communities, neighborhoods or commercial facilities. Commercial microgrid systems integrate all the aforementioned components to create an optimized generation-storage-distribution system that offers cost savings, energy resilience, and unparalleled control over their energy environment.
Get Ahead by Getting Behind-the-Meter with Keen
Our teams can help design the right combination of energy production and storage for your facility’s needs. We provide bespoke energy solutions that forecast energy needs, accommodate seasonal energy fluctuations and utilize automated monitoring and control systems to maximize efficiency. To learn more about our work, contact us today.