The distinction between kWh and kW is enormously important for understanding the economic implications of energy use and grid integrity, yet it is a concept that bankers, reporters, and most anyone who did not spend their college years battling physics problem sets into the wee hours of the morning struggles with. Thankfully, it is easy to understand if someone just explains it. So here goes:

kW, or kilowatts, is a rate. It is the power you are consuming right this instant. To use an automotive analogy, it is equivalent to how fast you are driving. In industry, kW is referred to as power.

kWh, or kilowatt-hours, is a quantity of energy. It is the amount of energy you have consumed after a given amount of time (like, a month, or twenty minutes). To continue the car analogy, kWh is like the number of miles you have driven. In industry, kWh is referred to as energy.

To get kWh from kW, simply multiply your kW by the number of hours applicable. Just like if you drive 20 miles per hour for two hours you will drive 40 miles, if you consume 20 kilowatts for two hours, you will use 40 kilowatt-hours.

That’s it.

The only thing that is a little tricky is that while mpg stands for miles per gallon, kWh stands for kilowatts times hours. So avoid the mistake of thinking something uses watts per hour, since that is like saying a car can drive 60 mph per hour. Electrical equipment either uses watts at any given instant, or consumes watt-hours over a period of time.

So now the question is: “why on Earth would I care?” As with any relatively esoteric math, this is a good question. It has an easy answer though: people charge you money based on both kWh and kW, and it is generally good to understand how people separate you from your hard earned dough.

When you pay your utility bill, you will be charged a price per kilowatt-hour, e.g. $0.15/kWh. This means at the end of the month if you used 400 kWh, your utility will charge you $60. If you run a large commercial and industrial building, your utility will also charge you for your peak kW too, e.g. $12/kW. This means the utility measures your average kW (or speed at which you are consuming electricity) every fifteen minutes, and whichever fifteen minute period has the highest usage determines your peak demand charge for the entire month; if for one fifteen minute period your building used 100 kW, then your utility would charge you $1,200, even if the entire rest of the month your building only used 80 kW. Generally, commercial and industrial buildings utility charges are about half demand and half monthly energy consumption. This means fifteen minutes a month determines half your utility payment!

Most building owners and operators have no idea this is happening, so in large buildings there is the opportunity to optimize equipment load scheduling so not everything comes on at the same time. For example, when all of your elevator motors are running, you could turn off the compressor on your chiller, reducing your peak demand. You could also put soft-starts on your heavy equipment so it ramps up over a few minutes instead of coming on all at once. This reduces its kW draw, (like how not flooring your car reduces RPM). Neither of those reduce energy use, but they can reduce your utility bill.

How do you convert between kW and kWh? Simply multiply kW by hours to get kWh. For example, if you buy a 1 kW wind mill, that means it produces 1 kW whenever the is fully blowing. On a mountain where the wind blows 6 hours per day, your 1 kW wind turbine will generate 6 kWh each day, or 90 cents worth of electricity per day. Alternatively, if you know your mountaintop house uses 30 kWh a day, then to generate 100% of your own clean energy, you would need to buy a 30 kWh / 6 hours = 5 kW wind turbine.

What you cannot do, however, is assume kWh divided by hours gives you peak demand. If in five hours you drove 30 miles, you cannot say the fastest you drove was 6 mph. You could have spent half an hour driving 60 mph and then hung out at a coffee shop for another 4.5 hours. Same thing with energy. If you used 30 kWh in five hours, you have no idea if all of that was used in 15 minutes (e.g. 120 kW for 0.25 hours), or if you simply used a nice easy 6 kW for five hours.

So there you have it. kWh vs. kW.