Recently, as the price of electricity in all sectors multiples, industries are looking increasingly at implementing a solar energy solution to help offset electricity costs as well as create a more sustainable operating model for their company. In addition to considering solar energy for their operations, companies also need to evaluate whether Behind-the-Meter (BTM) or Net Metering is the best solution for their business. Educational tools on how BTM vs Net Metering works will help the company save money and be more efficient in their energy use.
What is a Behind-the-Meter Solar System?
A BTM Solarthon includes a solar energy system that is located adjacent to the industrial facility’s operations and delivers solar energy directly to the industrial facility’s operations (for use by the industrial facility) before drawing any energy from the utility grid. The main objective of BTM is to use as much of the solar energy that is produced as possible in a self-sufficient manner.
Solar installations that contribute to the highest use of BTM are those facilities that have high daytime energy needs. These types of facilities will be able to use a greater portion of the energy they are producing from the sun, thereby reducing the amount of energy they will draw from the grid and lowering the company’s monthly utility bill.
What does Net Metering mean?
Through net metering, companies that have installed a solar energy system are able to sell their extra power back to the electric company (or utility). If a company’s solar energy system produces more energy than it uses, the company can sell that excess energy back to the electric company via a net meter. The utility will then issue the company a credit for the amount of excess power the company produced during that billing cycle. Then, when the company is not generating enough energy from its solar energy system to meet its energy needs, they can use their credits from net metering to reduce their costs for electricity.
The major benefit of using net metering is that none of the excess solar energy produced by a company’s system is wasted. Rather than having that energy go unused, net metering allows companies to earn credit for their excess energy production which will reduce the amount they have to pay for electricity in the future.
Main Differences between Behind-the-Meter and Net Metering
Behind-the-Meter (BTM)
A Behind-the-Meter (BTM) solar system is designed to maximize on-site consumption of solar energy. The electricity generated is used directly at the facility, reducing dependence on the utility grid. Any excess power remains unused unless paired with an energy storage system.
Key Benefits
- Maximizes self-consumption of solar power.
- Reduces electricity purchased from the utility.
- Minimal interaction with the power grid.
- Best suited for facilities with high daytime energy consumption.
- Higher return on investment when a larger share of the generated energy is consumed on-site.
Net Metering
A Net Metering system allows a facility to use solar energy while exporting surplus electricity to the utility grid. In return, the consumer receives credits that offset future electricity bills, making full use of the energy generated.
Key Benefits
- Uses solar power on-site while exporting excess generation.
- Earns credits for surplus electricity supplied to the grid.
- Reduces electricity costs through both self-consumption and export credits.
- Ideal for facilities with low or fluctuating daytime electricity demand.
- Delivers better returns when more excess energy is exported to the grid.
You could save lots of money by choosing either of the two products, but what makes them right for you will depend on how much energy you use, and what the applicable Net Metering rules are in your location as well as the time frame in which you choose to use your solar installation.
Which model is more cost-efficient?
The answer varies based on energy consumption patterns in the particular industry.
In cases where a factory works mostly on a day shift and is able to consume much of the electrical energy generated by solar, a Behind-the-Meter (BTM) system will typically provide more value in terms of hard dollar savings. The facility is able to reduce its dependence upon costly utility-generated electricity, thus maximizing its self-consumed or BTM-generated energy.
On the other end of the spectrum, if a factory has a daylight demand of relatively low levels or has seasonally variable access to electric power, they will find that Net Metering (NM) provides the highest degree of financial benefit from their solar investment. After the installation of a solar energy system, an NM facility can receive credits for excess generation produced during high-sun hours, leading to more savings over time.
In many instances, industrial manufacturers will obtain optimal results by using both the benefits of high-self consumption and the credits available through NM. This method allows the facility to utilize its solar generation efficiently while at the same time obtaining a credit for any excess production.
Conclusion
Both models of BTM and NM systems provide a viable means for industrial facilities to lower energy costs and enhance overall sustainability. Selecting the right solar model depends upon several factors, including energy consumption patterns, operating schedules, and local utility service provider policies.
When it comes to industries that consume the majority of their power throughout the day hours, significant savings can be found through using a Behind-the-Meter (BTM) system. For those companies that have fluctuating or variable energy requirements, using Net Metering provides added flexibility and allows for the best use possible of any excess solar electricity created. Before making an investment in solar, companies need to conduct an analysis of their current energy usage profile in order to determine if a Behind-the-Meter system, Net Metering or both would generate them the most significant financial savings over the life of the project.
