Where your electricity comes from – whether from your own solar panels or straight from the grid – determines how much you pay for power. That’s where the concept of Front of the Meter vs. Behind the Meter comes into play. These aren’t just buzzwords for describing energy sources. They have a bigger impact on your electricity bills and savings than you might think, especially when it comes to time-of-use rates, net metering, or battery storage. In this article, we’ll take a closer look at what these terms actually mean, why they matter to homeowners, and how FTM and BTM systems compare.
What Is a Behind the Meter System?
A Behind the Meter system is an energy system that generates power right on your property and delivers it directly to your home. That means, the energy produced gets consumed first before your meter ever records anything – hence, behind the meter.
BTM systems work simply and directly. Take the case of home solar systems, which is a BTM system popular among homeowners in Utah and across the U.S.
When the sun is shining, your panels produce electricity that your home uses immediately. If your system is paired with a battery, you can store surplus energy for later use.
Only when your solar production isn’t enough to meet your needs does your home pull electricity from the grid.
Therefore, with BTM systems, you actually buy less electricity from your utility company. And that results in a much smaller monthly bill.
This makes an even greater difference if you’re in a time-of-use (TOU) pricing arrangement.
Instead of using grid energy during expensive peak hours (typically late afternoon to early evening), you can instead use stored solar power (via solar batteries) or net metering credits you’ve accumulated.
Here are common examples of BTM systems for homes:
- Rooftop solar panels
- Solar Panels + Battery Storage
- Small wind turbines
- Gas-powered generators
- Residential fuel cells
- Microgrids
I looked deeper into BTM systems and found that even U.S. tech giants like Apple and Ikea have installed extensive BTM systems to act as their own power suppliers and cut down energy expenses. So, if it works for them, it can work for you as well.
What Is a Front of the Meter System?
A Front of the Meter system is a power-generation system situated outside your property, operating on a much larger scale and requiring huge infrastructure investment. Think of power plants, solar farms, and wind farms, among many others.
This is the default system most of us rely on – electricity is produced at a centralized location, fed through the grid, and distributed to multiple users. Before reaching your home, it passes through your meter first – hence, front of the meter.
You might be wondering, if BTM systems exist, why do we still need FTM systems?
The answer is simple. They provide a steady flow of energy when your BTM system isn’t generating enough, a sort of ‘safety net’.
But rather than seeing it as choosing one over the other, think of it as two systems working together to keep a single, larger energy system balanced…
When FTM systems struggle during peak demand, BTM systems help ease the load and reduce strain on the grid. On the other hand, when BTM production is insufficient, FTM systems can fill the gap.
Comparing Front of the Meter vs Behind the Meter Systems
Previously, we looked at BTM and FTM systems separately. Now, let’s take a different approach and compare them side by side in key areas where one clearly stands out over the other.
Immediate Savings on Your Energy Bill
Let’s say you go with solar as your BTM system. A home solar systems can cost as little as $0.08 kWh.
Compare that to the electricity you buy from an FTM system (i.e. power from your utility company), where the average rate sits at $0.19 per kWh.
Assuming the typical U.S. household consumption of about 900 kWh per month, installing a BTM system could slash your electricity costs by $99 per month. If you ask me, that’s already a big deal, especially when you look at how much that adds up over time.
Direct Ownership and Local Benefits
When you own a BTM system, you own your power source. And that brings benefits beyond just lower electricity bills.
For example, the solar tax credit, which I covered in my article on Form 5695, allows you to deduct up to 30% of your total solar installation cost from your taxes. You can also take advantage of RECs (Solar Renewable Energy Credits) and rebates from local utility companies.
Now, compare that to an FTM system, like a shared solar farm. You may still get benefits like bill credits and lower rates, but at the end of the day, the third party (i.e. whoever manages the farm) keeps most of the financial perks.
Flexibility in Energy Use
With a BTM system, you control how and when you use your energy.
Under net metering, for instance, if you generate more power than you use, your meter runs in reverse, and you earn credits for the extra electricity. You can then use these credits later to draw from the grid, whether at night or during high-demand hours.
Where net metering setups are unfavorable (California’s NEM 3.0, for example), having a BTM setup that involves adding energy storage (e.g. solar panels + solar battery) lets you store excess power instead of drawing from the grid.
That said, you won’t have this flexibility if you rely solely on an FTM system. You’ll be locked into your utility company’s schedule and pricing structure. And that’s not exactly ideal given how electricity rates rise every year.
Power Reliability and Availability
This is an area where I’d say FTM systems have the advantage.
As I mentioned, FTM systems operate on a much larger scale, and they have the capacity to provide a steady flow of electricity for household use, regardless of local conditions.
Since the grid pulls from multiple energy sources (solar farms, wind, natural gas, hydro, etc.), it can balance supply and demand more effectively.
Meanwhile, some BTM systems – like solar without battery storage – can be impacted by local conditions.
For example, solar panels generate less power on cloudy days or in winter months. If you don’t have battery storage, you’ll eventually have to pull electricity from the grid when solar production dips.
Choose Solar as Your Behind the Meter Energy System
Home solar systems have helped countless households save hundreds of dollars each year. And with incentives like tax credits and rebates making solar more affordable, it’s no surprise that more homeowners are making the switch.
If you want to start saving sooner rather than later, have a behind-the-meter (BTM) solar system installed. We, at Avail Solar, will handle all the paperwork and legwork, so you can transition to solar hands-off and stress-free.
Request a quote or call us today to speak with one of our solar experts