Power vs Energy

Energy and Power are closely related terms that refer to electricity, but they represent different aspects of its generation and use. Power, measured in watts (W) or kilowatts (kW), refers to the capacity of work at any given moment. In contrast, energy, measured in watt-hours (Wh) or kilowatt-hours (kWh), refers to the amount of work done over a period of time. This distinction is important for understanding electricity bills (energy charges and demand charges) and determining the appropriate size of a solar or backup power system.

• Power (watt) is the capacity (of work) at any moment (e.g., the sum of electrical loads at any one time).
  

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

Related terms include:

• Electrical load, or simply "load," which refers to the device or appliance that uses power, in contrast to the generator (any power "source") that creates power. Power represents the rate at which energy is drawn.
  

• Peak demand is the maximum load, usually for billing purposes, but also relevant for battery and generator sizing. For example, over the course of the month, the highest load occurred when several large electric appliances were operating at once, e.g., oven, stovetop, water heater, well pump, and air conditioning. Demand is mainly dependent on user behavior, the total number of loads available, and the number of loads that operate automatically.

Power Defined

Electrical power, measured in watts (W), indicates how much electrical energy is generated or supplied to a load at any moment. It is measured in kilowatts (kW) or megawatts (MW), where 1 kW equals 1,000 watts.

In a household, power usage in kW is determined by adding the loads of all active appliances. This usage can fluctuate based on appliance demand and solar panel output. A typical home may see a peak load of around 8 kW but can handle up to 20 kW during high-demand situations, such as all-electric heating.

For instance, a water heater usually consumes about 4.5 kW, and a toaster uses around 1.2 kW, making a total of 5.7 kW when used together. Peak household power can be calculated by summing the maximum power needs of all running appliances.

In grid-tied solar systems, if a home uses 3 kW while the solar system generates 2 kW, it draws 1 kW from the grid. Conversely, if the home consumes 2 kW and the solar system produces 3 kW, the excess 1 kW can be stored or sent back to the grid.

Energy Defined

Energy is the total amount of power consumed or generated over time, measured in kilowatt-hours (kWh), with 1 kWh equal to 1,000 watt-hours (Wh). For longer durations or high-power commercial applications, energy is often measured in megawatt-hours (MWh), which is 1,000,000 Wh.

For example, a 1-kilowatt appliance, like a coffee maker, uses 1 kWh if it runs for 1 hour and 0.75 kWh if it runs for 45 minutes. Because household appliances have varying power levels during operation, kWh generally reflects average power use over an hour.

Electricity bills typically show energy usage in kWh per month. A typical home averages about 33 kWh per day, 1,000 kWh per month, and 12,000 kWh per year, though usage can vary widely.

All power bills include an energy charge, but some may also have a power (demand) charge.

Examples

For an average South Dakota home:

Energy consumption:

• Average day: 33 kWh

• Average month: 1,000 kWh

• Annual: 12,000 kWh (12 MWh)

Peak power consumption:

• Minimal: 3 to 5 kW

• Average: 5 to 10 kW

• Above Average: 10 to 15 kW

• High: 15 to 20 kW

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

Utility billing

Electric bills typically consist of two types of charges: energy and power. Most residential accounts are billed solely for energy, which is measured in kilowatt-hours (kWh). This is the charge most people are familiar with and is referred to as the "volumetric charge."

However, certain accounts, such as all-electric homes, large residences, and commercial properties, may also incur demand charges. These charges are calculated based on both energy (kWh) and power (kW), reflecting the highest power usage during specific peak times throughout the day. The peak demand for the billing period is determined by the highest power usage averaged over a 15- or 30-minute interval, depending on the utility provider.

Using solar energy alone will help reduce energy charges, but it is less effective at lowering demand charges because peak demand periods can also occur at night. On the other hand, battery power systems can effectively reduce grid demand, since their default mode is to zero grid usage, thereby minimizing demand charges as long as they have sufficient charge available. For more information about rates and our local utilities, check out our post.

System design

The recommended and designed solar and battery power system depends on the customer's application and interests, as well as the type of utility charges targeted for reduction.

It's important to know that while solar power reduces grid demand during the day, it does not lower the demand charge, which reflects the highest peak usage during the billing period (possibly at night). However, the total energy consumed from the grid (in kWh) decreases because the solar panels generate electricity that replaces grid power, leading to savings on the volumetric (energy) charge.

Battery systems are essential for easing the burden on the electrical grid by responding to energy demands in real time, rather than only during peak solar production. With adequate capacity and charge, these systems, such as the Tesla Powerwall, can help mitigate grid demand peaks. The batteries are typically charged from solar, but they can also be charged from the grid when needed.

The complementary aspects of solar power (power for energy) and batteries (energy for power) illustrate their role in power system designs and how these electrical concepts relate to your utility bill.