07 06, 2023

{{ content.title }}

{{ content.description }}

You are likely familiar with front-of-the-meter (FTM) systems as a concept, even if you aren’t aware of the term. FTM systems are the large-scale power plants that are interconnected with the distribution and transmission systems. The “meter,” in this case, is a reference to the end-user’s service meter that measures how much grid energy is being used by the residence, business, or other facility. Power generated by FTM systems must pass through that electric meter before reaching an end-user, hence power plants are “front of the meter.”

In contrast, behind-the-meter (BTM) systems refer to electric-generating and storage systems (such as solar and battery storage) that are connected to the distribution system on the customer’s side of the meter. Energy that a facility receives from behind-the-meter solutions bypasses the electric meter, hence “behind the meter.” They differ from front-of-the-meter systems in many ways, including who typically owns the systems, where they are installed, and the size of the systems installed.

What are examples of behind-the-meter solutions?

Behind-the-meter solar and battery storage, along with other grid assets deployed at the distribution level like electric vehicle charging infrastructure, are broadly referred to as distributed energy resources (DERs). We highlight the most common types of distributed energy resources below:

  • Flexible load: The load of a facility can be a DER by pledging to be flexible. The most common form of demand flexibility comes in the form of load curtailment, incentivized through many utility and market operators’ demand response programs. These programs pay large energy users to curtail their load during times of grid stress. 
  • Energy storage: Lithium-ion batteries and other types of energy storage allow organizations to store and consume electricity when it is low cost, provide grid services, and more – creating energy bill savings and new revenue for the organization. These systems can often become even more sustainable and economic when paired with on-site solar
  • On-site solar: On-site solar can help to reduce the facility’s consumption from the grid. In some states and under specific circumstances, excess solar can be exported back to the grid, under a net metering program.
  • Electric vehicles: Much like a battery, smart EV charging can respond to grid signals and allow EV owners to shift their charging time to a period where price is lower. This time typically correlates with system demand. 

Note that it’s becoming increasingly common to have different types of energy resources on-site, like solar and battery storage systems that integrate with EV charging.

The distributed energy resource landscape

To effectively coordinate these resources, optimization software consisting of a site controller and cloud-based platform (highlighted in orange above) is essential. At Enel, our optimization software is called DER.OS – and it acts as the brain of the system, managing and controlling the flow of energy between the various DERs, the building/facility, and the grid. This allows the end-user to optimize their energy use to reduce demand charges, conduct energy arbitrage, and earn money from providing grid services like demand response.

DER.OS’s cloud-based platform provides real-time monitoring and analysis of energy usage, allowing for further optimization and the identification of potential issues or inefficiencies. By leveraging such a powerful optimization tool, organizations can effectively manage and optimize their behind-the-meter resources for maximum efficiency and cost savings.

What factors are driving increased adoption of behind-the-meter solutions?

There are multiple drivers behind the rapidly growing adoption of behind-the-meter energy resources, including:

  • Growing sustainability demands from stakeholders: Organizations are increasingly feeling pressure to decarbonize their operations. With on-site energy resources, they can take back control of how they’re producing and consuming energy – and more effectively track and reduce their Scope 2 emissions.
  • Rising energy costs: To avoid paying high costs for energy, many organizations are seeking out alternative solutions, like offsetting their grid consumption with on-site solar and battery storage. By generating their own energy or using battery energy storage systems, organizations can reduce their reliance on the grid, minimize their energy consumption during peak demand periods, and save money on their electricity bills.
  • Better project economics: The costs of DERs have drastically declined over the last decade. At the same time, new incentives like the investment and production tax credits under the Inflation Reduction Act are making behind-the-meter solutions more accessible and cost-effective for a wider range of energy consumers.
  • Increasing need for resilience: Many behind-the-meter solutions, like microgrids, offer operational resilience during grid disruptions, a growing concern as extreme weather becomes more frequent.

How do behind-the-meter solutions add value to organizations that adopt them?

A major advantage of behind-the-meter resources is their ability to reduce energy and demand costs on electricity bills. By optimizing energy use from solar panels and batteries, organizations can minimize the amount of energy they draw from the grid during peak demand times and shift energy usage from high-priced to low-priced hours. This flexibility can lead to significant bill savings over time. Furthermore, these assets can, in some cases, also participate in lucrative programs like demand response.

Behind-the-meter resources can also provide energy consumers with greater energy independence and resilience, as they are able to generate power on-site and can continue to operate even during grid outages. Learn how your organization can decide on the best energy resilience strategy by downloading our eBook “How to Evaluate Your Energy Resilience Needs.”

How can behind-the-meter resources help local communities?

Behind-the-meter resources are quickly growing more popular, as they provide several benefits to communities. For instance, when aggregated into a larger capacity as in a virtual power plant (VPPs), they can help to provide a powerful alternative to expensive peaking power plants, which utilities have traditionally called into use to avoid brownouts and blackouts.

VPPs act like and have the same effect as a traditional centralized peaking power plant. Both solutions ultimately have the same goal: ensuring that energy demand on the grid is instantaneously met by the available energy supply, and that the grid remains stable. But they achieve this in a significantly different way. 

Traditional peaking power plants operate out of one physical location. In addition, they typically are very polluting because they are often powered by fossil fuels. VPPAs provide a more sustainable alternative, using existing DERs – like solar and battery storage, for example – to balance energy on both the supply and demand side. When deployed at scale, DERs can help the grid operate reliably, in a cheaper and cleaner manner.

Are behind-the-meter energy solutions right for my organization?

Because there are so many different DERs available, it’s likely that at least one option could benefit your organization – the decision tree in our eBook “How to Evaluate Your Energy Resilience Needs” can help you understand what solution may be best for you.

Behind-the-meter solutions, or DERs, can be an especially good fit for organizations that want to reduce their energy costs, improve energy resilience, and reduce their carbon footprint. However, the specific benefits and costs will depend on a few factors, including the facility’s energy usage, location, and complexity of the project.

Industries that have high energy costs (by usage or high tariffs) are good candidates for behind-the-meter solutions. This includes industries like commercial real estate, industrial manufacturing, data centers, and governments and schools. Behind-the-meter battery storage is particularly well-suited for organizations that operate during peak demand periods, as this solution can help reduce peak demand charges.

Location is also important – different states offer different incentives to adopt behind-the-meter solutions. These incentives can help offset the initial cost of purchasing and installing a behind-the-meter energy system. It is important to work with an energy partner that can help you identify all potential value streams to see what solutions make economic sense.

Contact our team today to find out how much value you can unlock with a tailored distributed energy resource strategy.

Learn more about advancing your energy strategy by leveraging our integrated energy solutions.