When taking a look at the energy usage of your home or business, understanding the fundamental differences between kilowatt of power (kW) and kilowatt-hours (kWh) and their meanings is an important concept. People sometimes use these two terms interchangeably, but they actually measure different things. This guide will break down these terms, explain how they affect your energy bill, explain kw vs kwh in solar, and address their applications in Wisconsin’s home and commercial uses.

Read more about the relationship between kilowatt and kilowatt-hours from our Amicus member partner, Straight Up Solar.

What is a Kilowatt (kW)?

A kilowatt is a unit of power used to measure the rate of energy production or consumption – a snapshot of the capacity of a system or appliance. For instance:

• Solar Panel Output: A home solar panel might have a capacity of 420 watts (0.4 kw), and a standard solar array might be rated at 12 kW. This means the system can generate 12 kW of power under ideal sunlight conditions
• Appliance Usage: On average, 50 gallon electric water heaters use elements rated between 4.5 kW and 5.5 kW, which is the power consumption while the electrical appliance is running.

In easier terms, think of kilowatts as the speedometer for energy. Kilowatts indicate the amount of energy that people use or produce at any given moment.

What is a Kilowatt-Hour (kWh)?

A kilowatt-hour of energy (kWh) is different from a kilowatt because it measures energy used or produced over time. This means it is the total amount of electricity used when you run a 1kW appliance for 1 hour. For example:

• Usage: if you leave a 100-watt lightbulb on for 10 hours, you will have used 1 kWh of energy (100 watts x 10 hours = 1,000 watt-hours or 1 kWh)
• Solar generation: a 12 kW system that operates at full capacity for 4 hours produces 40 kWh of energy ( 12 kW x 4 hours = 40 kWh)

Your electric power usage measures in kilowatt-hours, and your electric bill total at the end of each month reflects this usage.

Image courtesy of the Engineering Mindset

Why Does the Difference Matter?

Understanding the difference between kW and kWh as units of measurement is helpful when evaluating your current energy usage and how solar can offset it.

System Sizing

• Designers typically size both home and commercial solar panel systems in kW. For instance, a 14 kW home solar system in Wisconsin may be appropriate for a large household or a small business depending on energy needs.
• The designed size of the system dictates how much energy it can produce in kW. Solar systems are generally sized to offset as close to 100% of energy usage as possible, generally going slightly over in Wisconsin to account for less light in winter.
• Switching to energy efficient appliances such as installing heat pumps or replacing lightbulbs may reduce electrical demand, while adding appliances such as hot tubs will increase it.

Energy Bills

• Your utility company charges for energy based on kWh consumption. Knowing what high-demand appliances you run, and how often, can help determine your sizing for solar and reducing cost.

Performance Monitoring

• Solar energy output performance is tracked in kWh, which helps homeowners and businesses understand how much energy their system is generating over time.

Image courtesy of JMHPower

Applications in Home Solar

Wisconsin’s residential solar adoption has grown significantly in the last 10 years, according to the SEIA. Market changes like reduced panel costs, federal tax benefits, and decreased material expenses support the increase in residential solar adoption. Generally, when a homeowner is looking in to solar for their energy offset, they focus on the following:

Daily Energy Needs

• A normal Wisconsin home uses around 1,070 kWh per month, or about $186 per month. Residential solar systems size in kW is designed to offset close to 100% of that consumption as possible.

Peak Sunlight Hours

• Wisconsin averages about 4.3 peak sunlight hours per day. A 12 kW system can generate about 48 kWh during peak conditions.

Net Metering Benefits

• Wisconsin utilities provide net metering, allowing solar system owners to reduce their electricity costs by earning credits for excess solar production.

Applications in Commercial Solar

Commercial solar systems typically are sized larger to offset the increased demands. This increase in production can offset things like refrigeration, machines that run 24 hours, elevators, etc. Key considerations include: 

High Energy Consumption

• Businesses such as manufacturing facilities, food storage, or schools may use tens of thousands of kWh monthly. Businesses employ solar systems sized in the hundreds of kW to offset these demands.

Demand Charges

• Many Wisconsin utilities have a demand charge based on the highest kW usage during the day. Solar can help to reduce these peaks by generating power on-site.

Tax Incentives and Depreciation

• Federal tax credits and accelerated depreciation (MACRS) programs make commercial solar investments pay for themselves earlier, increasing ROI and lowering energy costs over time.

View more about commercial solar applications with CH Coakley’s offset from solar.

Designing the Right System: Balancing kW and kWh

Determining the right size solar system involves understanding both power (kW) and energy (kWh) usage per month. Here’s how they work together:

Assessment of Energy Usage:

• Review your utility bills to determine monthly and annual kWh usage.
• Identify peak usage times and season variations. This is especially true in Wisconsin where we need power to maintain home comfort.

System Sizing in kW:

• Get a quote for solar tailored to your current and expected energy demands.
• Your consultant will help consider other factors, such as roof space, shading, permitting, and budget.

Energy Production in kWh:

• Using advanced modeling software, solar installers are able to accurately predict the system’s annual kWh output using local sunlight data and panel efficiencies.
• We will size the system to produce enough kWh to offset most, if not all, of your energy usage.

Real-World Examples

Lets review numbers from an average residential solar project in Milwaukee:

• Energy Usage: The household consumes 700 kWh per month.
• System Size: A 6 kW solar system fits the average electrical needs of the house.
• Sunlight Data: Milwaukee receives about 4.2 peak sunlight hours daily on average.
• Energy Production: The system generates about 756 kWh monthly (6 kW x 4.2 hours x 30 days = 756 kWh).
• Offset: The solar system covers all the home’s energy needs, cutting monthly costs and shielding against future rate hikes.

For example, at Aspirus Divine Savior Hospital, Arch installed a 369kW system to cover a large part of the healthcare center’s energy needs.

Special Considerations for Wisconsin

Our state’s unique climate and policies also have an effect on solar design and output.

Seasonality

• Shorter winter days mean less solar energy, while longer summer days boost production but also increase electricity use due to A/C units.

More about how solar works in winter with Arch.

Snow Coverage

• Although snow is generally not an issue and tends to melt off, short, dark days may reduce energy production.

Policy Support

• Programs like Focus on Energy, state tax exemptions, and rural incentives help reduce the cost of solar.

More about solar in winter with Ipsun Solar.

Conclusion

To make the best decision about your solar energy usage, you must understand how people use kWs over time and how they translate to kWh. To recap: Kilowatts define the power capacity of your system or the demand of an appliance, and kilowatt-hours measure the energy produced or consumed over time. By considering your specific use cases, Arch can help you design a system that meets your energy needs, reduces your carbon footprint, and delivers long-term financial benefits.

Whether you’re a homeowner in Kenosha or a business owner in Sheboygan, a well-designed solar solution can transform how you think about your energy usage. Consult with Arch today to explore how kW and kWh play a role in your journey toward sustainable energy in the Badger State.