Behind-the-Meter

Electricity generation or storage systems located on the user's side of the utility meter, serving onsite usage directly.

Behind-the-meter (BTM) refers to renewable energy generation, battery storage, microgrids, or backup power systems located directly on the electricity consumer's side of the utility meter. Unlike front-of-the-meter utility-scale installations that feed power directly into the public grid, BTM systems supply electricity directly to the onsite facility. Any excess power generated may either be stored locally or pushed back through the meter to the grid, depending on local regulations and net metering policies. Investors analyze BTM capabilities to evaluate how energy technology providers, industrial firms, and real estate developers bypass grid capacity constraints and high transmission costs. By generating and consuming power onsite, commercial and industrial users can avoid utility demand charges, secure a highly reliable power supply, and bypass the multi-year regulatory and physical queues required to connect new facilities to the regional transmission grid. When evaluating companies in this sector, investors look at the adoption rate of BTM assets as a sign of localized energy independence and operational resilience. However, a key pitfall is assuming BTM systems completely isolate a user from grid-related risks. Regulatory changes to net metering tariffs, changes in standby utility fees, and the high upfront capital expenditure of installing onsite generation can significantly alter the payback period and return on investment for these systems.

A manufacturing facility consumes 5,000 MWh of electricity annually at a utility rate of $120 per MWh, resulting in a $600,000 annual power bill. The facility installs a behind-the-meter solar and battery system that generates 3,000 MWh of onsite power annually, reducing its grid draw to 2,000 MWh. The new annual utility cost is 2,000 MWh $120 = $240,000, yielding an annual utility bill savings of $600,000 - $240,000 = $360,000.