Energy and Power
The terms Energy and Power are often used interchangeably to describe electricity. But despite their close relationship, the terms energy and power actually represent different measurements in the context of both solar power systems and utility electric bills.
Power (kW) is capacity to do work at any moment (i.e. instantaneous)
Energy (kWh) is capacity to do work over time (i.e. hours, days, months, etc.)
The kilowatt (one thousands watts) is the common unit of measure for electricity. A kilowatt (kW) refers to an amount of power produced or consumed at any moment (instantaneous). 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, a solar panel produces power the moment it is exposed to sunlight.
When measured over a period of time, power is then quantified in kilowatt-hours (kWh). When dealing with a volume of electricity - produced, consumed, or stored in a battery - over a period of time, it is described as energy. For example, powering a 1 kilowatt load (i.e. a coffee pot) continuously for one hour equals 1 kilowatt-hour of energy consumed. In reality however, loads and solar panels operate at changing rates. When measuring multiple loads consuming (or solar panels generating) power, kilowatt-hours describe the total amount over time based on the average power level.
Kilowatt-hours are measured over longer periods as well, like days, months or a year. For example, electricity bills are monthly, so energy charges are denoted in kWh/Month.
For an average South Dakota home...
Average day: 32 kWh
Average month: 980 kWh
Annual: 11,760 kWh
Peak power consumption:
Average: 5 to 8 kW
High: 10 to 12 kW
For solar system design, we have to also account for the daily and seasonal variations of both consumption and solar generation.
Utility electric bills also distinguish between energy and power consumption, especially on commercial accounts. In most residential accounts, homeowners are billed only for energy (kWh) - or the "volume" of electricity use. Commercial accounts, and some residential accounts, are billed for both kWh and power (kW). The additional kW charge represents the peak power demand (during specific times of the day) for electricity over the billing period.