Behind the Meter, In Front of the Meter, and Where Microgrids Fit

Pamela Isom

Sep 3

5 min read

Solar-powered energy facility with battery units and power lines at sunset, overlaid with blue data dashboards.

Image Generated by ChatGPT

If you're not an energy professional, phrases like "behind the meter" and "in front of the meter" can make the electric grid sound more complicated than it needs to be.

The easiest way to understand them is to start with something familiar: your electric meter. The meter at a home, business, hospital, manufacturing facility, or data center measures the electricity exchanged between the customer and the electric grid. It also gives us a useful dividing line, the larger electric system on one side, the customer's own energy system on the other. Increasingly, those two sides interact in interesting ways.

Behind the Meter: Start With Your Home

Behind-the-meter (BTM) resources sit on the customer's side of the electric meter. A familiar example is rooftop solar. If you install solar panels on your home, your home can use the electricity they generate, reducing what you need to buy from the grid, and depending on your system and utility arrangement, excess electricity may be sent back to the grid.

But not every behind-the-meter energy system is a microgrid. Rooftop solar by itself is generally a BTM resource, not a microgrid. Add battery storage, controllable household loads, intelligent controls, and the capability to disconnect safely from the grid and keep operating independently, and you're much closer to a residential microgrid. The same concept scales: a hospital, university, military installation, manufacturing facility, or data center can have its own combination of energy resources, loads, and controls.

That brings us to distributed energy resources, or DERs, energy resources connected to the distribution system, often close to where electricity is used. DER does not mean renewable energy; DERs can include renewable and non-renewable generation, battery storage, fuel cells, combined heat and power, generators, electric vehicles, and flexible or controllable loads. A microgrid can coordinate different types of these resources within a defined electrical boundary, operating connected to the larger grid or, when appropriately designed, independently from it.

Microgrids Can Have Different Energy Sources

It's easy to associate microgrids primarily with solar panels and batteries, but their energy mix can be much broader, solar, wind, battery storage, natural-gas-fueled generation, fuel cells, combined heat and power (CHP), thermal energy systems, or other resources, depending on the application. A CHP system, for example, can produce electricity while capturing useful heat for heating, hot water, steam, or industrial processes. The appropriate mix depends on what the microgrid needs to accomplish, reliability, resilience, economics, available resources and fuels, environmental objectives, and the needs of the loads being served.

So a useful distinction: microgrid does not mean renewable energy system. It describes how energy resources and loads are organized and coordinated within a defined electrical boundary, not a requirement that they use a particular fuel or technology. And while water and natural gas infrastructure can interact with or support a microgrid, the "grid" in microgrid generally refers to the electric grid.

Why Behind-the-Meter Microgrids Matter

A behind-the-meter microgrid gives a customer more options for managing its own energy needs, maintaining power during a grid outage, reducing electricity purchased from the grid, shifting consumption away from expensive periods, using locally available resources, and managing generation, storage, and flexible loads together. Depending on applicable market and interconnection rules, some resources may also provide services back to the larger grid.

The benefits extend well beyond the electric bill. For a hospital or clinic, energy resilience can help keep critical systems running during an outage, communications, medical equipment, electronic health records, and the infrastructure supporting telehealth. For a manufacturer, resilience can help avoid costly production interruptions. For a data center, it can help support large and increasingly dynamic electricity requirements.

The larger idea: customers are no longer necessarily just consumers of electricity. They can also generate, store, manage, and sometimes exchange it.

In Front of the Meter: The Grid Side

Cross the meter, and in-front-of-the-meter (FTM) resources are generally on the grid side, primarily supplying or supporting the broader electric system rather than one customer's internal needs.

The distinction isn't the technology itself, a battery, or solar, can sit on either side. BTM and FTM tell us something about where a resource sits in relation to the customer and grid, not simply what the resource is.

So Where Do Microgrids Fit?

A microgrid isn't defined simply by being behind or in front of a meter. At its core, it brings together interconnected loads and distributed energy resources within a defined electrical boundary and manages them as a coordinated system, with the ability to connect to and disconnect from the larger electric grid as a key characteristic. Many microgrids serve a particular facility or campus and include BTM resources; others support communities, critical infrastructure, or groups of customers, with very different energy mixes. What matters is understanding the electrical boundary, the resources being coordinated, the loads being served, and how the system interacts with the larger grid.

This is where the meter becomes particularly interesting. Consider a facility with local generation, battery storage, controllable loads, and other on-site resources. During normal conditions, it might purchase electricity from the grid while also using its own resources. During periods of high grid demand, it might reduce how much it draws or shift when certain loads operate. During an outage, a properly designed microgrid may be able to island, disconnecting from the larger grid while continuing to power designated loads, whether that's hospital equipment, emergency communications, manufacturing operations, or the infrastructure keeping telehealth available.

The meter, then, is more than a line separating customer and utility infrastructure. It's also a point of interaction between the two.

Why This Matters for AI and Data Centers

AI is contributing to increasing electricity demand, particularly through the expansion of data centers and computing infrastructure. But focusing only on how much electricity AI will consume misses the more important question: how can these facilities interact more effectively with the electric grid?

Depending on its design, location, energy resources, interconnection, operating requirements, and regulatory environment, a data center may have options beyond simply drawing electricity from the grid. That creates an interconnected set of questions: Where should the facility be located? How much power will it actually need? What mix of energy resources fits? And how should grid impacts be weighed together, rather than one at a time?

The future of energy won't be defined only by how much new generation gets built. It will also depend on our ability to make better-informed decisions.

Microgrids sit at the center of that conversation because they bring together energy resources, loads, resilience, and controls, some behind the meter, some in front of it. Increasingly, understanding how customers, distributed resources, and the larger electric system interact may matter just as much as understanding what sits on either side of the line.

The meter remains an important boundary. What happens around it is becoming much more interesting, and AI is not the destination. Better decisions are.

Better energy decisions start with understanding where your organization stands. Our Energy AI Readiness Assessment & Implementation services evaluate the strategy, data, technology, governance, and workforce capabilities needed to prepare for AI-enabled energy systems. Learn More.