Behind-the-meter: What you need to know

The way we power our homes is changing fast. Heat pumps are replacing gas furnaces, solar panels are going up on rooftops, and home batteries are becoming common in garages. All of these systems have one thing in common: they sit behind the meter.

 All grid-tied energy systems are situated either "in front of the meter" or "behind the meter." As more homeowners take control of their energy production and usage, understanding what that means and why it matters can help you make smarter decisions about your home’s energy setup.

The difference between behind-the-meter (BTM) and front-of-meter systems (FTM) comes down to where your energy systems sit in relation to your electric meter. Think of your electric meter as a checkpoint between your home and the utility grid. Everything on the grid side of the meter is “in front of the meter”—power plants, transmission lines, substations. Everything on your side of the meter is “behind the meter.”

A BTM system provides power that can be used directly in your home without passing through that checkpoint. If electricity travels through your meter before reaching your home, it came from the grid—front of the meter. If it doesn’t need to pass through the meter at all, it came from a BTM system. 

Behind-the-meter vs front-of-the-meter: what’s the difference

There are more BTM options available to homeowners today than ever before. Here’s a breakdown of the most common ones:

Solar panels

Rooftop solar panels are the most familiar BTM energy system. When your panels generate electricity, it flows directly to your home's appliances and lights without ever touching the grid. When you produce more than you need—on a sunny afternoon, for example—that excess flows back through your meter to the grid, typically earning you a credit on your bill through net metering.

Home batteries

A home battery stores electricity for use when your solar panels aren't producing—at night, during cloudy weather, or when the grid goes down. Electricity stored in a home battery goes directly from the battery to your appliances without passing through your electric meter, making it a true BTM resource. Paired with solar, a home battery is one of the most effective ways to maximize your energy independence.

Heat pumps

Heat pumps are an increasingly popular BTM system for heating and cooling. Because they run entirely on electricity, they can be powered by your own solar generation rather than drawing from the grid or from natural gas. Heat pumps are two to four times more energy efficient than traditional HVAC systems, and pairing one with solar can dramatically reduce your total energy costs.

EV chargers and vehicle-to-grid (V2G)

A home EV charger is a BTM system because the electricity powering your car comes directly from your home, not the grid. If your home runs on solar, you’re fueling your car with clean energy you generated yourself. But the relationship between EVs and the grid is evolving quickly. Some EVs now support bidirectional charging—also called vehicle-to-grid (V2G) or vehicle-to-home (V2H)—meaning your EV's battery can send electricity back to your home or the grid when needed. As bidirectional charging becomes more common, more EVs are functioning as mobile BTM energy storage systems.

Microgrids

A microgrid is a more advanced BTM setup that works like a miniature version of the larger electric grid—generating, storing, and distributing electricity for a small number of buildings or a community. Microgrids typically combine solar generation with battery storage and can operate independently from the main grid during outages. All components of a microgrid—the panels, batteries, and distribution system—live behind the meter.

Virtual power plants (VPPs)

A virtual power plant (VPP) takes BTM systems a step further. Rather than just powering your home, your solar panels, battery, smart thermostat, or EV can be enrolled in a VPP—a network of thousands of BTM devices that work together to support the grid during periods of high demand. Utilities or energy companies manage these networks and compensate participating homeowners, with some programs paying between $500 and $1,000 per year, according to a 2024 California VPP study. VPPs are expanding fast and are now available to homeowners in a growing number of states.

In contrast, here are the energy systems that sit in front of the meter—on the utility’s side:

Utility-scale generation

Large power plants—whether fossil fuel-based like coal and natural gas, or renewable like utility scale wind and solar farms—are front-of-the-meter. The electricity they generate feeds into the grid and must pass through your meter before it reaches your home. 

Utility-scale energy storage

Large battery storage facilities installed by utilities also sit in front of the meter. Like utility-scale generation, the electricity they store and dispatch must travel through the transmission system and your meter before it can be used.

Transmission and distribution lines

The poles, wires, and substations that carry electricity from power plants to your neighborhood are all front-of-the-meter infrastructure—the backbone of the centralized grid that most Americans still rely on for the bulk of their electricity.

For most of electricity's history, homeowners had no choice but to sit on the receiving end of the grid—paying whatever their utility charged for power that traveled through meters, transmission lines, and substations before reaching their homes. Behind-the-meter systems change that equation in several important ways:

Lower electricity bills 

Every kilowatt-hour your BTM system generates is one you don’t have to buy from the grid. With electricity prices rising faster than inflation and the average household on track to spend more than $75,000 on electricity over the next 25 years, that’s a significant amount of money to take back into your own hands.

Net metering credits 

In most states, when your BTM solar system produces more electricity than your home needs, the excess flows back through your meter and you receive a credit on your bill. This net metering arrangement lets you effectively use the grid as a bank—depositing excess energy when you have it and withdrawing from it when you need it. 

That said, net metering policies vary widely by state and are actively changing in many areas. Some states have moved to "net billing," which compensates exported energy at a lower wholesale rate rather than the full retail rate. It's worth checking what policy applies in your area before sizing your system.

Time-of-use rate advantages

Many utilities now charge more for electricity during peak demand hours—typically afternoons and evenings. A home battery can store cheap off-peak electricity and discharge it during expensive peak hours, reducing what you pay. Learn more about time-of-use rates and how to take advantage of them.

Earning income from VPPs 

If you enroll your BTM devices in a virtual power plant, you can get paid to share your stored energy with the grid during peak demand events. Depending on the program and your location, this can add hundreds to over a thousand dollars per year to your household income.

Energy independence and resilience 

BTM systems reduce your dependence on the grid and the utility companies that manage it. A solar-plus-battery system can keep your home powered during outages—and grid reliability is becoming a growing concern for American homeowners. The number of weather-related power outages doubled over the last decade, with about 80% of all major outages caused by extreme weather events like hurricanes, heat waves, and winter storms. Texas alone experienced more than 200 major blackouts between 2000 and 2023. 

As the grid faces increasing strain from extreme weather, aging infrastructure, and surging electricity demand driven by AI data centers and electrification, BTM systems offer something the grid alone can't guarantee: power when you need it most. 

The number and variety of BTM options available to homeowners has never been greater. With electricity prices rising and the grid under increasing strain from extreme weather and AI-driven demand, the case for exploring and utilizing BTM options has never been stronger.

Whether you're starting with solar, adding a battery, upgrading your heating and cooling with a heat pump, or installing an EV charger, EnergySage can help you compare quotes from vetted installers and find the right fit for your home.