Behind the Meter vs Grid Power: Cost Parity, Technology, and Strategic Value Shifting the Balance in Favor of BTM Solutions
- Alex Chapman
- Nov 24, 2025
- 4 min read
Behind the Meter Power vs Grid Power: Cost Comparison
Electricity Spikes and Data Centers
Data centers are a major driver of recent economic growth in the United States. The downside has been the incredible demand for electricity they have created on an aging and strained grid. Below is a chart showing intraday price swings in submarkets of PJM (the grid manager for Ohio and the surrounding states). The one submarket that stands out is the Dominion network, abbreviated DOM, which covers most of Virginia. That market includes Northern Virginia, a major data center hub for the world. This has created conflict between many in the local community, who are being forced to pay higher prices for electricity, and those benefiting from economic growth.
This spike in prices has resulted from a combination of factors that have come together over the past few years to create this precarious energy situation:
Lack of investment in generation capacity. For the past 40 years, U.S. electricity demand was relatively flat, with industrial demand dropping and increasing energy efficiency limiting growth.
A byzantine regulatory system that has made not only adding capacity but also new transmission a slow and painful process.
A surprise increase in demand (often cited as an excuse, even though electrification and data center trends were becoming apparent years ago).
Inconsistent policy. Instead of using an all-of-the-above policy, we have seen very extreme policy support or resistance for certain types of energy, creating an inefficient system that has stymied investment and growth potential.
Because of poor planning, we now need fast, cheap, and modular solutions to come to market quickly. Often, these solutions are behind-the-meter power (BTM).
Slash the Spike
A new trend, most evident in the Dominion network, is constant but short price spikes in energy markets. For conventional energy, the solution would be baseload plants. However, this approach ignores the fact that it is a 7–10-year solution. We need solutions in time frames measured in months to quarters, not years or decades.
The first and most obvious solutions are renewables combined with storage technologies (batteries). Many of the spikes occur in the middle of the day when renewables such as solar would generate power. Also, most of the spikes are minutes in length, which would be easily covered by battery storage systems. For power needs longer than what solar and storage can offer, the next best option that can be quickly built would be behind-the-meter (BTM) fuel cell systems, which can be tied in with a solar and storage system. All of this can be built in months, not years.
Focusing on baseload power plants would be equivalent to using a gold bar as a hammer—it could work, but why pay extra when a hammer does the job just as well and is cheaper and easier to obtain?
The Cost of Fuel Cell, Solar, and Storage Systems
Whether looking for behind-the-meter (BTM) power for data centers, microgrids for industrial parks, or peaker (smaller energy plants for periods of peak demand, not for baseload generation) assets for the grid, solar, storage, and fuel cells are generally the best, most cost-effective, and timely options available.
For a solid oxide fuel cell system, the power can cost somewhere in the range of $0.08–$0.11 per kWh. For a solar and storage system (depending on the size of the battery storage system), a similar price range is also possible (not including potential REC credits for the PJM grid). This is an important inflection point since grid power for industrial users in Ohio in August 2025 averaged $0.0859 per kWh, and commercial users averaged $0.1149 per kWh.
Now that these solutions are at price parity, even for industrial applications, the discussion is no longer constrained by price. Instead of waiting for the grid, we can build behind-the-meter (BTM) power systems without having to make a tradeoff between cost and speed of build.
To illustrate how this has happened, here is a theoretical example showing how the bill for a behind-the-meter (BTM) system would compare with grid power.
Cost Breakdown Theoretical Example (per kWh)
Fee Type | Behind the Meter (BTM) | Grid Power |
Generation Fee | $0.125 | $0.090 |
Transmission Fee | $0.00 | $0.020 |
Distribution Fee | $0.00 | $0.020 |
Base Fee | $0.00 | $0.005 |
Demand Charge | $0.00 | $0.010 |
Misc Fee | $0.00 | $0.010 |
Total | $0.125 | $0.146 |
Key Points:
Behind-the-Meter Power (BTM) only incurs a generation fee ($0.125/kWh), with no transmission, distribution, base, demand, or miscellaneous fees.
Grid Power has a lower generation fee ($0.090/kWh), but additional charges for transmission, distribution, base, demand, and miscellaneous fees bring the total to $0.146/kWh.
Overall, in this example, behind-the-meter (BTM) power is cheaper per kWh ($0.125) compared to grid power ($0.146), mainly because it avoids extra utility fees.
Using behind-the-meter (BTM) power can result in cost savings by eliminating several utility-imposed fees, even if the generation cost itself is slightly higher than grid power. This makes behind-the-meter (BTM) solutions attractive for businesses looking to reduce electricity expenses in areas with high electricity prices caused by a strained grid.
Clarification: Historically, and in most cases, grid power is cheaper, but in the current environment, that is not the case. Behind-the-meter (BTM) technologies now benefit from increasing scale, which lowers cost, and a much tighter grid, which has caused price spikes due to regulatory constraints. The inflection point was only reached for some technologies, like fuel cells, this year, but the grid constraints that have caused prices to rise look likely to continue for years. That is why behind-the-meter (BTM) is now, and likely will continue to be, a more cost-effective solution going forward.
Conclusion
In today’s rapidly evolving energy landscape, behind-the-meter (BTM) power solutions—such as solar, storage, and fuel cell systems—have reached cost parity with traditional grid power for many industrial and commercial users. While grid power has historically been cheaper, recent spikes in electricity prices, regulatory constraints, and increased demand from data centers have shifted the balance. Behind-the-meter (BTM) systems now offer a more cost-effective and timelier alternative, eliminating extra utility fees and providing flexibility to meet urgent energy needs. Renewables and storage can also offer grid solutions if built quickly to help deal with price spikes. As grid constraints persist and technology scales, behind-the-meter (BTM) solutions are likely to remain the preferred choice for businesses seeking reliable, affordable, and fast-to-deploy energy options.
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