BTM and FTM Energy Storage Compared: Differences, Applications, and Regulations for Industrial Companies
Whether a battery storage system lowers your energy costs or generates revenue on the electricity market depends largely on one decision: is it located behind your company's meter or in front of it? This distinction between BTM (Behind the Meter) and FTM (Front of the Meter) determines not only the technical integration but also the regulatory framework, the treatment of grid fees, and the entire business model for your storage project.
Florian Kroiß studied energy systems engineering at Technische Hochschule Mittelhessen and has worked in the energy sector since 2019. For six years he was self-employed in solar and storage, advising on and delivering projects from initial sizing through to ongoing operation. In 2025 he moved into commercial & industrial BESS and is helping build BEO, with a focus on making battery storage technically and economically viable for industrial companies.
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For industrial companies with registered power measurement (RLM)—meaning 15-minute peak load recording—the question of "BTM or FTM?" is the first strategic decision to make. This article explains both concepts, outlines the current regulatory framework, and shows which storage type is the better choice in which scenario.
Key takeaways at a glance
- BTM (Behind the Meter) storage systems are located behind the meter and reduce energy costs at the site through peak shaving, self-consumption optimization, and electricity procurement optimization.
- FTM (Front of the Meter) storage systems have their own grid connection and generate revenue in energy markets through ancillary services, spot market arbitrage, and direct marketing.
- The grid fee exemption under Section 118 (6) of the EnWG expires on August 4, 2029. Projects with a final investment decision made before the AgNes regulation comes into effect are protected by grandfathering clauses.
- The AgNes reform (as of May 2026) provides for a moderate capacity price of approximately €4 to €7/kW/a for new storage systems starting in 2029, but no energy price.
- Both storage types can be combined at a single site. As an owner-operator, BEO offers both components—BESS 1 (BTM) and BESS 2 (FTM)—without requiring any investment or operational effort from the customer.
What do BTM and FTM mean for battery storage?
BTM (Behind the Meter) refers to battery storage systems installed behind a company's grid connection point that influence electricity consumption directly at the site. FTM (Front of the Meter) refers to storage systems with their own grid connection that operate as independent assets directly on the public power grid.
The electricity meter at the grid connection point is the reference point for this distinction. Everything on the customer side of the meter is "behind the meter." Everything on the grid side is "front of the meter." While this may sound like a purely technical description at first glance, it is the central classification in the professional BESS (Battery Energy Storage System) market, as the position in the grid determines which revenue streams are accessible, which regulatory requirements apply, and how grid fees are calculated.
BEO reflects this distinction with two specific product modules: BESS 1 is a BTM storage system with a typical capacity of 200 to 5,500 kWh at the customer's existing grid connection. BESS 2 is a large-scale FTM storage system with its own medium-voltage grid connection and a typical capacity of 3,000 to 20,000 kWh. Both modules can be flexibly combined at one site.
BTM and FTM storage in direct comparison
The following table compares the key differences between BTM and FTM storage for industrial and commercial companies:
BTM storage is designed for cost optimization at the site, while FTM storage is designed for revenue generation in energy markets. In practice, both approaches complement each other because they leverage different value drivers.
Typical use cases: Which storage type for which purpose?
BTM applications: Reducing costs at your own site
BTM storage systems reduce a company's energy costs through three key levers: peak shaving, self-consumption optimization, and electricity procurement optimization. The common denominator: the storage system changes the site's load profile, meaning less power is drawn from the grid or consumption is shifted to more cost-effective time windows.
Peak shaving is the most powerful lever for many industrial companies. The capacity price—the component of grid fees based on the highest measured 15-minute power demand (expressed in €/kW/year)—penalizes every single load peak for the entire billing period. A storage system can absorb these peaks by providing energy at short notice instead of drawing it from the grid. Grid fee reductions through peak shaving and atypical grid usage (the targeted shifting of loads away from the grid operator's high-load time windows in accordance with Section 19 (2) of the StromNEV) typically result in savings of more than 20% on grid fees.
Self-consumption optimization becomes relevant when a PV system is present on-site. The storage system absorbs excess solar power and makes it available later, rather than feeding it into the grid for low compensation. This increases self-consumption and, consequently, the degree of self-sufficiency (the share of self-generated and consumed electricity in total consumption). The savings effect is typically between 5 and 10%.
Electricity procurement optimization leverages price differences throughout the day: the storage system charges during periods of low or negative spot prices (for example, at midday when PV feed-in is high) and discharges during price peaks (typically in the morning and evening). The savings effect is typically more than 10%.
FTM applications: Generating revenue in the electricity market
FTM storage systems act as independent market participants and generate revenue by participating in energy markets. Because they have their own grid connection, they are regulatorily easier to integrate into market processes than BTM storage systems.
Balancing energy (the provision of system services to stabilize grid frequency) comprises three products: FCR (Frequency Containment Reserve), aFRR (automatic Frequency Restoration Reserve), and mFRR (manual Frequency Restoration Reserve). Due to their fast response times, battery storage systems are particularly well-suited for FCR and aFRR.
Spot market arbitrage leverages price differences in the day-ahead and intraday markets: the storage system buys electricity during hours with low prices and sells it during hours with high prices. Increasing price volatility in the German electricity market makes this business model more attractive. In the first half of 2026, the day-ahead market recorded 298 hours with negative electricity prices. At the same time, the average exchange price was 99 €/MWh, which indicates significant price spreads.
Direct marketing allows storage capacities to be deployed across multiple markets simultaneously via aggregators or virtual power plants (the pooling of decentralized assets for joint marketing).
BEO operates BESS 2 FTM large-scale storage systems, which are primarily designed for electricity trading and grid balancing. By integrating them into a virtual power plant, BEO pools storage capacities across different locations to generate additional revenue.
Regulatory framework: Grid fees, the Energy Industry Act (EnWG), and the AgNes reform
As of: July 2026. The regulatory framework is currently undergoing significant change. All information reflects the current status; changes resulting from the AgNes draft determination are possible.
The regulatory conditions for BTM and FTM storage systems differ significantly and are currently undergoing fundamental changes.
Current situation: Battery storage systems currently benefit from the grid fee exemption under Section 118 (6) of the Energy Industry Act (EnWG), a protective mechanism against the double charging of grid fees during charging and discharging. This exemption applies to storage systems commissioned within 18 years of August 4, 2011, i.e., until August 4, 2029. For BTM storage, Section 19 (2) of the Electricity Grid Fee Ordinance (StromNEV) is also relevant, which allows for individual grid fees in cases of atypical grid usage or high annual utilization (base load).
AgNes reform: The Federal Network Agency (BNetzA) presented its preliminary status report on the framework for the general electricity grid fee system (AgNes) on May 27, 2026This reform will replace the StromNEV as of December 31, 2028, and will come into effect on January 1, 2029. The formal consultation for the draft determination is scheduled for summer 2026, with the final determination expected by the end of 2026.
For battery storage systems, this specifically means:
New storage systems will be required to pay a limited annual capacity price of an estimated €4 to €7/kW/year to contribute to grid financing. No energy price will be charged. Existing storage systems are protected by grandfathering clauses: those who make a final investment decision before the determination comes into effect and commission the storage system by August 4, 2029, will retain their current grid fee exemption.
The AgNes framework determination includes transitional provisions for special industrial tariffs (base load and atypical grid usage under Section 19 (2) StromNEV). The existing base load regulation will be extended for existing customers until December 31, 2031. For atypical grid usage, the current discount structure will remain in place on a transitional basis.
For industrial companies, this has a clear implication: anyone considering a battery storage system should keep an eye on the grandfathering deadlines. As an owner-operator, BEO handles the regulatory management: grid connection procedures, permits, and ongoing adjustments to the changing legal framework are managed by BEO, not the customer.
Note: The regulatory parameters mentioned reflect the current status of the BNetzA and are not yet finalized. For an assessment of the individual impact, we recommend a case-by-case review by qualified consultants.
Combining BTM and FTM: One storage system or two?
For industrial companies looking to both reduce costs and participate in the electricity market, the practical question arises: is one storage system enough for both, or are two separate systems required?
The hybrid use of a storage system for both BTM and FTM purposes sounds economically attractive. In practice, however, it involves significant control complexity and additional requirements.
EMS requirements: A high-performance energy management system (EMS) must coordinate multiple use cases in real time without compromising local supply security or peak-shaving strategies. It must simultaneously optimize self-consumption, monitor load peaks, and process market price signals.
Balancing group management: With BTM storage, the system shares the grid connection with other consumers. This requires precise measurement and separation of self-consumption and grid feed-in. A balancing group manager must take on the complex responsibility for schedules, which represents a significant hurdle in practice.
The pragmatic solution: In many cases, a separate FTM storage system is the simpler option. It is technically clearly defined, easier to integrate into market processes from a regulatory perspective, and simpler to pre-qualify for balancing energy markets.
BEO offers both components (BESS 1 as BTM and BESS 2 as FTM) that can be flexibly combined at a single site. The BEO EMS coordinates multiple use cases in real time. The customer only provides the space; BEO handles financing, installation, and operation as the owner-operator.
Market development: Why BTM and FTM are becoming relevant for industrial companies now
The German battery storage market is growing dynamically. In the first quarter of 2026, more than 2 GWh of new storage capacity were commissioned, an increase of around 67% compared to the same period last year. The total stock of stationary battery storage in Germany thus grew to around 28 GWh. The primary drivers are large-scale storage systems with an individual capacity of more than 1 MWh, the deployment of which has nearly quadrupled compared to the previous year.
In the commercial segment (20 kWh to 1 MWh), newly installed storage capacity also rose by around 42% to approximately 0.16 GWh. This trend has structural causes: rising grid fees, increasing price volatility in the electricity market, and the regulatory shift brought about by the AgNes reform are creating economic incentives for battery storage in industry.
Price volatility in the day-ahead market, with 298 hours of negative electricity prices in the first half of 2026 alone, makes arbitrage strategies more attractive. At the same time, rising grid fees are increasing the value of peak shaving through BTM storage.
More than 100 companies in logistics, automotive, chemicals, and glass and metal processing already trust BEO. Our zero-investment model—where BEO finances, installs, and operates the storage system—lowers the barrier to entry for industrial companies looking to capitalize on these market developments.
Frequently asked questions about BTM and FTM storage
What does Behind the Meter (BTM) mean?
Behind the Meter refers to energy systems installed behind a company's grid connection point. They directly influence on-site power consumption and enable applications such as peak shaving, self-consumption optimization, and electricity procurement optimization.
Can BTM storage systems also participate in the electricity market?
Yes, under certain conditions. A BTM storage system can also provide balancing energy or engage in spot market arbitrage via a separate balancing group. However, the requirements for metering, balancing group management, and EMS control are significantly higher than for a dedicated FTM storage system. In many cases, a separate FTM storage system is the more pragmatic solution.
What permits does an FTM storage system require?
FTM storage systems require registration in the Federal Network Agency's Market Master Data Register (MaStR), a grid connection process in accordance with the Energy Industry Act (EnWG), and, depending on capacity, an emission control permit under the Federal Immission Control Act (BImSchG). As the owner-operator, BEO handles the entire permitting process.
When does a battery storage system become worthwhile for my company?
Whether a storage system is worthwhile—and which type is best—depends on your individual load profile (the timing of your electricity consumption), grid fee structures, and the available space at your site. BEO evaluates this in our free 360° potential analysis based on your actual RLM data.
Conclusion: BTM or FTM: the right choice for your site
Choosing between BTM and FTM is not an either-or decision. BTM storage reduces energy costs at the site, while FTM storage generates revenue in the electricity market. Which approach offers the greatest leverage depends on your individual load profile, savings goals, and available space.
The bottom line is that regulatory deadlines—especially the protection of legitimate expectations regarding grid fees until 2029—make a timely assessment worthwhile. In our free BEO 360° potential analysis, BEO uses your actual load profile to determine which combination of BTM and FTM will have the greatest impact on your site, and as an owner-operator, we handle the financing, installation, and operation.
Sources
- Federal Network Agency: Current considerations on the reform of the electricity grid fee system, May 27, 2026
- German Solar Association (BSW-Solar): Record growth in battery storage, May 2026
- ZFK: Negative electricity prices 2026: An overview, July 2026
- Gesetze im Internet: Section 118 EnWG
- Rödl & Partner: Federal Network Agency specifies AgNes grid fee reform, June 2026
