Behind-the-meter (BTM) power refers to on-site generation that bypasses the utility grid interconnection queue. For AI datacenters facing 4-7 year grid interconnection delays, BTM solutions include natural gas generators, solar+battery systems, and emerging small modular reactors (SMRs). BTM can reduce time-to-power from years to months while offering 20-40% lower power costs.
Grid interconnection queues are 4-7 years in ERCOT/PJM. BTM solutions can deliver power in 12-24 months for gas, faster for solar+storage.
Avoid transmission charges, demand charges, and capacity payments. BTM power can be 20-40% cheaper than grid at scale.
Control your own power supply. No exposure to grid outages or curtailment events. Critical for 99.999% uptime SLAs.
Capex: $800-1,200/kW
LCOE: $0.045-0.065/kWh
Timeline: 18-24 months
Pros
Cons
Capex: $1,500-2,500/kW (solar+4hr storage)
LCOE: $0.050-0.080/kWh
Timeline: 12-18 months
Pros
Cons
Capex: $5,000-8,000/kW (projected)
LCOE: $0.060-0.090/kWh (projected)
Timeline: 4-7 years (first units)
Pros
Cons
| Factor | Grid Connection | BTM (Natural Gas) | BTM (Solar+Storage) |
|---|---|---|---|
| Time to Power | 4-7 years | 18-24 months | 12-18 months |
| All-in Cost | $0.06-0.10/kWh | $0.045-0.065/kWh | $0.05-0.08/kWh |
| Reliability | 99.9% | 99.99% | 99.9% (with backup) |
| Carbon Emissions | Varies by grid mix | ~400g CO2/kWh | Zero |
| Upfront Capex | Low (connection fee) | $800-1,200/kW | $1,500-2,500/kW |
Yes, but most operators maintain grid connection for backup and arbitrage opportunities. Pure BTM (islanded) requires more redundancy. Typical configurations use BTM for 80-100% of baseload with grid for peaks/backup.
BTM assets can be financed separately (project finance) or as part of the datacenter. Lenders like the cost certainty of owned generation. However, capex increases and technology risk must be addressed. PPAs with third-party generators can reduce balance sheet impact.
Green hydrogen is emerging but currently expensive ($4-8/kg). Fuel cell datacenters are in pilot stages. Economics improve if hydrogen is co-produced with other industrial uses. Watch this space for 2027+ deployments.
Yes. Solar qualifies for 30% ITC (more with domestic content/energy community bonuses). Battery storage now has standalone ITC. Some states offer additional incentives. Consult tax advisor for your specific situation.
Compare grid vs BTM economics for your specific site and power requirements.
Open BTM ROI Calculator →Complete guide to PPA structures, pricing, and risk management for datacenters.
Understanding the step-by-step process of connecting large loads to the grid.
How we calculate the ROI of behind-the-meter power vs. wholesale grid rates.
Real-time grid congestion and curtailment risk by zone
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