As energy costs continue to increase and climate change concerns mount, more companies are looking for ways to control their energy use. They can do this by installing Behind-the-Meter systems – technologies and infrastructure located on the customer’s side of the utility meter. From solar panels to battery storage units, behind-the-meter systems allow users to generate their own energy, store it for later use, and manage their consumption more effectively and efficiently.
This article will explore what behind-the-meter means, how behind-the-meter differs from front-of-the-meter, examples of the different technologies used, and the benefits that behind-the-meter solutions can provide.
Behind-the-meter (BTM) refers to the energy systems located on the customer’s side of the utility meter. These systems could include solar panels, battery storage, or energy-efficient appliances. The energy produced or stored in these systems is used primarily for the building’s own consumption, reducing the electricity needed from the grid and lowering the electricity bill. In many cases, excess energy generated by behind-the-meter systems can be sold back to the grid, providing an additional source of income or energy credits for the customer.
On the other hand, Front-of-the-Meter (FTM) systems are on the utility side of the meter. Front-of-the-meter typically includes large-scale energy generation and storage facilities like power plants, wind farms, solar parks, and large-scale energy storage systems. The energy produced or stored in these systems is used to supply the grid and distributed to various customers – residential, commercial, or industrial. Front-of-the-meter resources play a significant role in grid stabilization and management, helping to balance supply and demand, ensuring the reliability of energy supply, and increasingly supporting the integration of renewable energy sources into the grid.
BEHIND-THE-METER VS. FRONT-OF-THE-METER
While behind-the-meter and front-of-the-meter systems are integral parts of the energy mix, they serve different roles and impact energy users differently. Behind-the-meter systems allow customers to take control of their energy generation and use, offering potential cost savings and increased resilience. Front-of-the-meter systems, meanwhile, are vital for overall energy supply and grid stability; these systems are more critical than ever as we transition towards more renewable energy sources.
EXAMPLES OF BEHIND-THE-METER-SYSTEMS
- Solar Photovoltaic (PV) Systems: Solar PV systems convert sunlight directly into electricity using semiconducting materials. They’re used to generate clean, renewable energy, reducing reliance on power from the grid and lowering energy bills. They’re popular due to their scalability – they can be installed on residential rooftops or deployed on a larger scale in commercial settings.
- Battery Energy Storage Systems: Battery storage systems, such as those offered by EVESCO, store excess energy for use at a later time. They are particularly beneficial when paired with solar PV – surplus energy generated during the day can be stored and used in the evening or during power outages. This utilization of energy storage improves energy self-sufficiency. It helps manage demand and lower costs using stored energy during peak price periods.
- Wind Turbines: Wind turbines can be installed at locations to generate electricity from the wind, a plentiful and renewable resource. Like solar PV systems, these units can provide electricity directly to homes, businesses, or devices not connected to the grid. They’re particularly beneficial when combined with energy storage in rural or remote areas with strong and consistent wind resources.
- Combined Heat and Power (CHP) Systems: CHP, often called cogeneration, simultaneously generates electricity and usable heat from the same energy source, usually natural gas. CHP systems are an efficient way to use energy as it captures the heat that would otherwise be wasted in electricity generation. CHP systems are used in commercial and industrial locations with constant demand for electricity and thermal energy.
- Electric Vehicle (EV) Charging Stations: EV charging stations can be considered a behind-the-meter system when connected to renewables and energy storage. They draw their power from the energy storage system to charge electric vehicles, often recharging the energy storage system during off-peak times or when there’s excess generation from renewable sources. Combining a commercial EV charging station with renewables and energy storage can reduce grid demand, lowers energy costs, and optimizes energy use.
- Energy Management Systems (EMS): While not a source of power generation, an EMS is a crucial behind-the-meter system that uses software and technology to monitor, control, and optimize the performance of energy-generating and energy-using devices. EMS solutions can manage when and how energy is used, taking advantage of periods of low demand or high generation to maximize efficiency and minimize costs. More and more EMS’ utilize artificial intelligence to forecast energy demand, further optimizing energy usage.
- Fuel Cells: Fuel cells generate electrical energy through a chemical reaction, often involving hydrogen. They are highly efficient and produce fewer emissions than traditional combustion-based power generation. While fuel cell systems can still be more expensive than other solutions, they are becoming increasingly viable as costs become lower and they are used in broader sustainability and resilience strategies.
- Microgrids: A microgrid is a localized energy grid that can operate independently of the primary utility grid. It typically involves multiple energy generation sources, such as solar PV, wind, fuel cells, or generators, combined with energy storage and may serve a single building or a larger community. Microgrids provide energy security, resilience, and grid independence, allowing users to maintain power during outages and potentially sell excess capacity back to the grid.
- Geothermal Systems: Geothermal systems harness heat from beneath the Earth’s surface to provide heating, cooling, and in some cases, electricity. While these systems require substantial upfront investment and depend on geographical location, they can offer considerable long-term savings and environmental benefits.
- Demand Response Systems: Although not a power generation system, demand response is crucial in behind-the-meter energy management. These systems enable users to respond to utility signals to decrease energy consumption during peak times, resulting in cost savings and helping maintain grid stability. Large energy consumers can take advantage of financial incentives from utility companies for participating in demand response programs.
- Smart Appliances: These devices, ranging from HVAC systems to refrigerators, are designed to optimize their energy use according to the user’s needs and available energy. They can be programmed to operate at times of lower energy cost or high renewable energy generation. With the addition of energy storage, users can further minimize energy costs and improve efficiency.
These are just a few examples of the technologies and systems that fall under behind-the-meter solutions. The specific choice of solution will depend on various factors such as the user’s energy needs, available resources, geographical location, and financial capacity. However, regardless of the specific technology employed, the ultimate goal of behind-the-meter systems is to optimize energy use, reduce costs, support the grid, and contribute to a more sustainable and resilient energy future.
EXAMPLES OF FRONT-OF-THE-METER SYSTEMS
- Utility-Scale Solar Farms: These large-scale installations of solar panels generate considerable amounts of electricity that feed directly into the grid. They’re typically located in areas with high levels of solar and contribute to a clean, renewable energy supply.
- Wind Farms: Wind farms consist of multiple wind turbines that convert wind energy into electricity on a large scale. The electricity generated is fed into the grid, supplying power to homes, businesses, and industries. Wind farms are a crucial part of many countries renewable energy infrastructure.
- Hydropower Plants: Hydropower plants harness the energy created from falling or flowing water to generate electricity. They are often located at dams or rivers and can supply large amounts of renewable energy to the grid.
- Natural Gas Power Plants: These power plants generate electricity by burning natural gas, which is less carbon-intensive than coal or oil. These plants are seen to serve as a bridge technology in transitioning to a fully renewable grid, offering flexibility and reliability.
- Large-Scale Energy Storage: These systems, such as utility-scale battery storage or pumped hydro storage, store excess energy and release it when demand on the grid is high or the energy supply is low. They are crucial for grid stability and for integrating intermittent renewable energy sources like wind and solar. These systems will require stringent quality certification, such as UL-9540.
- Nuclear Power Plants: Nuclear power plants generate electricity through nuclear fission. While they are highly controversial due to issues like waste disposal and potential accidents, they also provide a pivotal portion of base-load power in many countries and create virtually no greenhouse gas emissions.
- Grid Management Systems: As energy management systems are crucial behind-the-meter, grid management systems are also vital on the front-of-the-meter side. These systems use technology and data analysis to balance supply and demand, integrate renewable energy, manage outages, and maintain the stability and reliability of the grid. They utilize large datasets and artificial intelligence to help predict trends.
These front-of-the-meter examples collectively ensure a consistent and reliable supply of electricity. Each one plays its unique role, whether generating renewable energy, providing energy storage, or ensuring the smooth operation of the entire grid. As the global energy systems evolve, these front-of-the-meter solutions and the various behind-the-meter solutions will facilitate a future sustainable, resilient, and low-carbon energy mix.
THE BENEIFTS OF BEHIND-THE-METER-SYSTEMS
Commercial and industrial energy users often operate on a large scale, with sizable energy requirements. As a result, they stand to gain a lot from installing behind-the-meter systems. Here’s why these entities might go for behind-the-meter solutions and the benefits they could reap:
- Cost Savings: One of the primary motivations for installing behind-the-meter systems is the potential for significant cost savings. By generating their own electricity, companies can mitigate their dependence on power from the grid, which often comes at a higher cost. Battery storage can also save on costs by storing excess energy generated during periods of low cost and low demand for use during peak times, avoiding peak pricing.
- Energy Independence and Security: Behind-the-meter systems offer commercial and industrial users greater control over their energy supply. In a grid outage, companies with their own generation and storage systems can continue operating, avoiding potential losses and ensuring business continuity.
- Sustainability Goals: Many companies commit to sustainability targets for their corporate social responsibility initiatives. Implementing renewable energy systems, including solar panels or wind turbines, enables these companies to shrink their carbon footprints and demonstrate their commitment to sustainability.
- Regulatory Compliance: In some countries and regions, regulations or incentives might encourage or require adopting renewable energy or energy efficiency measures. By deploying behind-the-meter systems, companies can comply with these regulations and take advantage of incentives, such as tax credits or rebates.
- Improved Power Quality: Some behind-the-meter systems can improve the power quality in a facility, reducing voltage dips, swells, and interruptions that can affect sensitive equipment. Improving power quality can be particularly beneficial in industries where power quality is critical such as manufacturing.
- Load Management: Behind-the-meter energy management systems can help companies understand and manage their energy use more effectively. They can shift their load to off-peak times, participate in demand response programs, and optimize their energy use based on real-time data, further reducing costs and improving efficiency.
Commercial and industrial energy users can invest strategically in behind-the-meter systems and take advantage of these benefits. Not only can these systems offer financial advantages and resilience, but they can also support sustainability goals as part of a Corporate Social Responsibility program.
The choice of the right behind-the-meter asset will depend on each organization’s specific circumstances and needs. It could be a solar PV system for a company with ample roof space and a commitment to sustainability, a battery storage system for a company with high demand charges caused by EV charging and a need for resilience, or a combination of these and more. Regardless of the choice, these assets represent an opportunity to minimize energy costs, improve sustainability, and enhance energy independence.
Several well-known companies have successfully implemented behind-the-meter systems and are reaping substantial benefits. Here are a few compelling examples:
- Apple: Apple’s headquarters in California, known as Apple Park, features one of the world’s largest on-site solar energy installations. It includes 17 megawatts of rooftop solar and 4 megawatts of biogas fuel cells. Apple has also installed on-site battery energy storage to store excess power. The company states that globally they are powered entirely by renewable energy.
- Walmart: The retail giant has installed solar panels and wind turbines as part of its commitment to power its global operations with 100% renewable energy by 2035. Solar panels help cut energy costs and move the company closer to its environmental goals. Walmart has also actively participated in demand response programs for many years. It works with utilities and demand response providers to curtail its energy usage during high grid demand, helping stabilize the grid and earning financial incentives.
- IKEA: IKEA has installed solar panels on several retail location rooftops globally to reach the goal of 100% renewable energy for IKEA retail, its renewable electricity share was 76% in 2022. The solar installations and other initiatives, which include wind turbines, allow IKEA to strive towards its 2030 goal of becoming ‘climate positive.’
- Mars Inc.: The food and candy manufacturer has installed wind turbines and solar farms at many of its locations worldwide. Mars’ U.S. operations are entirely powered by renewable energy, with a major part coming from its Mesquite Creek wind farm in Texas.
These companies and many more have seen substantial energy cost savings and made meaningful strides toward their sustainability goals. By generating their own power, they’ve also increased their energy independence, lessened their environmental footprint, and demonstrated leadership in transitioning to a more sustainable future.