Behind the Meter

Behind the Meter is a dividing line between power that is supplied to consumers from a public monopoly utility and power that is generated, stored and used by private consumers


Behind the Meter is a term used widely and variously to describe how things stand in our electricity system and in energy systems throughout the western world. Yet what precisely should our industry make clear the term means to us in Canada? Does it fully reflect the state of Canada’s electricity system today? And does it equip our industry with the collective comprehension necessary to answer the most urgent questions that face our electricity system—most notably, what actions must we take and advocate to enable Canada to meet its international climate change commitments for 2030 and 2050? What Is Behind the Meter? is our brief attempt to nail down this term and, in doing so, help move us closer to answering this and other vital questions.

What is Behind the Meter?

A line to separate private from public, unregulated from regulated

Behind the Meter can be understood literally. For our organization and our electricity system, it refers to all energy that originates from a source other than the publicly owned and operated power grid. (As such, all energy “In Front of the Meter” comes from the publicly owned and operated electricity grid.) Understood this way, Behind the Meter is a dividing line between power that is supplied to consumers from a public monopoly utility and power that is generated, stored and used by private consumers—be they homeowners, commercial businesses or industrial operations.

This literal definition gives utilities and authorities that regulate them a fixed point of reference when it comes to the regulation of power generation, transmission, distribution and storage. In Front of the Meter is regulated and Behind the Meter is unregulated. On the flip side, Behind the Meter provides consumers with a fixed point when thinking about paying for power. In Front of the Meter means consumers pay for the power they use and Behind the Meter means consumers do not pay for the power they use.

Behind the Meter can also be understood metaphorically. Thought of in this way, Behind the Meter is an actual place—a somewhat hidden or even secretive place in which the publicly owned, operated and regulated electricity system does not hold sway. What goes on in this area is private: Behind the Meter is home to private consumers who carry out unregulated activities.

A definition for a simpler era

Behind the Meter gained currency in the 1970s. It began as a way to define and describe energy-generating technologies that homeowners and businesses were starting to install. Solar panels, small wind turbines and gas-powered generators dominated the trend. Supplementing their power supply through these Behind the Meter methods gave consumers a way to reduce their dependence on the electricity grid, lower their electricity costs and express their commitment to environmental protection.

Slowly but surely, Behind the Meter technologies and activities advanced to more fully reflect the term, as solar panels and wind turbines became more adaptable and affordable, and as homeowners and building owners began installing geothermal HVAC systems in homes, commercial structures and industrial facilities.

At the same time, federal and provincial governments carved out a role for themselves Behind the Meter, offering rebates and other incentives to encourage Canadian homeowners and businesses to adopt these and other Behind the Meter methods. Governments also began to certify consumer products such as appliances for their energy efficiency. These incentives and certifications helped define regulatory policy with respect not only to current products and equipment, but also emerging advances that would eventually find their way Behind the Meter.

Ahead of the curve is now behind the times

While Behind the Meter may have made sense for the past fifty years as the dividing line that defines and delineates the power system in Canada, it has become an increasingly untenable way to think about energy generation, transmission, distribution, storage and use in 2021—and especially beyond. Smart grids and micro grids in particular are changing the very nature of how people and communities think about and deal with power generation, transmission, distribution, storage and use.

These grids are blurring the line that separates Behind the Meter and In Front of the Meter. While smart grids and micro grids are In Front of the Meter, they are influenced by attitudes and activities taking place Behind the Meter. At the same time, software applications are changing how consumers—be they homeowners, commercial businesses or industrial spaces—think about all aspects of power consumption, but especially storage and use. Yet again, while these apps are used Behind the Meter, they are influenced by decisions and actions taken by utilities and governments that operate In Front of the Meter.

We care about them and they care about us

This situation speaks to the growing inadequacy of Behind the Meter. More than ever before, utilities care about the attitudes and activities of consumers Behind the Meter, while consumers have a vested interest not only in decisions and actions made by utilities, but also in current and emerging policies and regulations that govern the electricity grid.

Compounding the inadequacy, smart grids, micro grids and software apps are sure to accelerate in sophistication and expand in reach. As a result, how consumers of all stripes think about and use electricity is guaranteed to become more diverse and complex, causing the dividing line to blur even more. Canadians would not be surprised if technological advances, market demands and consumer needs erase the line altogether, rendering it irrelevant to a clear and common understanding of the state and future of electricity in Canada.

Is “At the Grid Edge” a better way to describe the shifting terrain?

At the Grid Edge is a label that reflects the fluidity and unpredictability of energy generation, transmission, distribution, storage and use. Similar to Behind the Meter, At the Grid Edge works both as a literal and metaphorical description. Like Behind the Meter, this new term serves as a literal way to separate power that comes from public monopoly utilities and power that is generated, stored and used by private consumers.

Yet, unlike the old phrase, At the Grid Edge takes into account rapid and dramatic change that is increasingly inherent in the system. Just as a shoreline gives way to the forces of tide and wind, the grid edge moves back and forth according to forces of human need, environmental necessity and technological development. Even this figurative rendering is not fully ssatisfying and is likely to become increasingly so as our country’s electricity industry changes in profound ways. These changes include:

  • leveraging the billions of dollars invested over the years in Canada’s provincial and regional electricity grids;
  • transforming the entire power system to take full advantage of current and emerging investments and advances;
  • enabling Canada to meet its international climate change commitments coming due in 2030 (a stringent target for greenhouse gas emissions) and 2050 (net-zero carbon emissions); and
  • responding when the largest commercial and industrial users move off the public grid, causing rates for homeowners to spike.

Recognizing the threats

This last point constitutes one of several consequential threats to local utilities as changes resonate in the terms Behind the Meter and At the Grid Edge emerge and accelerate. Put in the form of five questions, these threats are:

  1. How will local utilities maintain and increase revenues once several large electricity customers leave the grid partially or altogether?

  2. How will local utilities react to homeowners and owners of small business when they rise in anger as their electricity rates rise precipitously in the wake of these large customers leaving the electricity grid?

  3. How will local utilities respond when municipal, provincial and federal elected representatives advocate rate freezes or other regulatory reforms on behalf of these constituents?

  4. How will local utilities act when disruptive energy suppliers enter the market, challenging current regulations and rendering concepts such as Behind the Meter and At the Grid Edge moot?

  5. How will our industry maintain a balanced and reliable electricity system, and preserve our investments to enlarge and strengthen the grid when the activities of consumers—from the smallest to the largest—operating Behind the Grid accelerate and expand?

Our industry’s and country’s futures demand a total solution

In light of the shifting reality and uncertain future, Canada needs to take a step beyond Behind the Meter and identify a total solution that enables not only our industry to bear up against these threats, but also to empower the country to overcome foreseeable challenges and move adroitly to address unforeseen problems. Unlike the days when Behind the Meter was more relevant, greater energy efficiency is nowhere near enough to adapt to changes and deal with challenges. Government incentives and certifications are nowhere near enough anymore either.

Canada needs a national review that enables the country to find out what consumers are doing and why; what technologies are emerging fastest; what disruptive new entrants are coming soonest; and what regulatory reforms are needed to govern it all—especially how regulatory improvements to our electricity system can remain safe, reliable and affordable, can preserve the value of its investments, and can enable our country to fulfill its climate change commitments.

Amid all the growing uncertainty, Canadians know one thing for sure: the grid of 2050 will not be the grid of today. Canada needs to prepare for that eventuality not only by understanding the true meaning of Behind the Meter, but also by moving beyond it.

Related Resources