Power vs Energy

The terms Energy and Power are often used interchangeably when describing electricity. But despite their close relationship, the terms energy and power actually represent different measurements. Understanding the difference is helpful in the context of both solar/battery power systems and electric consumption (loads).

Terms simplified:

  • Power (watt) is the capacity (of work) at any moment (i.e. the sum of electrical loads right now)

  • Energy (watt-hours) quantifies the amount (sum) of work done over time; based on hours (average power), and is also expressed in days (kWh/day), months (kWh/month), etc.).

Power vs Energy Defined

A kilowatt (one thousand watts) is the typical measure of power for a household. A kilowatt (kW) represents the level of power generated or consumed at any moment. For example, a water heater uses 4.5 kW of power, and a toaster uses 1.2 kW of power; running both at the same time equals 5.7 kW of power. Likewise, solar panels produce power whenever they are exposed to sunlight, and the intensity of the sunlight causes their power capacity to vary at any one time.

For instance, if your home is using 3 kW and your solar power is generating 2 kW, you will be using only 1 kW from the grid; furthermore, if you are using 2 kW and your solar power is generating 3 kW, you will have 1 kW excess solar power (that can be stored in a battery, back-fed to the grid, or simply curtailed).

Since power (both usage and generation) fluctuates, it gets summed up as the average amount over time (energy).

Power use or generation over a period of time is the measurement of energy, typically quantified as kilowatt-hours (kWh). For example, powering a 1-kilowatt load (i.e. a coffee pot) continuously for one hour equals 1 kilowatt-hour of energy consumed. But in reality, various loads turn on and off and run at varying power levels, so kWh ultimately represents the average power use over the hour.

Kilowatt-hours are quantified over longer periods as well, such as day, month, or year. For example, electricity bills are monthly, so energy charges are denoted in kWh/Month. Also, when measuring thousands of kW, one thousand kW equals one megawatt (MW), which may be used for annual quantities such as MWh/year.


For an average South Dakota home...

solar energy

Energy consumption:

  • Average day: 33 kWh

  • Average month: 1,000 kWh

  • Annual: 12,000 kWh (12 MWh)

Peak power consumption:

  • Efficiency: 3 to 5 kW

  • Average: 5 to 10 kW

  • High: 10 to 15 kW

  • Very high: 15 to 20 kW

  • Extra high: over 20 kW is possible with larger homes, especially those with electric heat.

Utility billing

Your power bills also distinguish between energy and power. Most residential accounts are billed only for energy (kWh), which is the "volumetric charge" that everyone is familiar with.

Some accounts are also assigned demand charges (typically larger homes and commercial) which bill for both energy (kWh) and power (kW). The demand charge is based on the highest power usage (during the specified, "peak" times of the day, averaged over a 15- or 30-minute interval depending on the utility) over the billing period.

Solar energy reduces the energy charge, but even though it reduces demand from the grid during the daytime, it is not actually effective at reducing the demand charge since peak usage may happen at night. Battery power systems, however, can be effective at reducing demand from the grid, since they are powering the home at all times (as long as they maintain their charge).

System design

When sizing a system only for energy bill reduction, then we only need to consider kWh. But when designing backup/battery power systems, sizing for peak power is essential as well.

When sizing a battery for a backup system, both energy and power needs must be accounted for. The battery capacity must be sufficient to handle the peak load (when multiple appliances operate simultaneously), and the battery capacity must also be sufficient for the energy (kWh) needs for at least 24 hours.