Kilowatt vs Kilowatt Hour

Solar Energy Podcast

The difference between kilowatt and kilowatt hour is explained.

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Transcript of podcast:

Hey everybody this is Dillon. You are listening to the Solar Energy Podcast from Cambio Energy. I have a question here about the difference between kilowatt and a kilowatt hour?

A lot of rate plans from your utility, especially commercial rate plans, will include a cost for your Kilowatt Demand and also your units of Kilowatt Hours, which is your Demand over time which adds up to an actual unit if power that you’re able to purchase.

Some residential plans in Arizona have this too. They call it a combined advantage instead of a time advantage. Time advantage is where you have on-peak and off-peak kilowatt hours.

A kilowatt is a 1000 watts. If you’re using 1000 watts in your home at any given split second, or moment in time, then you are using 1 kilowatt. But, that is for an infinitely small moment in time. If you do that for 1 hour then you have used, essentially purchased 1 kilowatt hour of electricity.

Why is kilowatt is important is because for that given moment in time, if you need 1 kilowatt and every one of your neighbors is using 1 kilowatt, then a power plant needs to provide that maximum amount. Even if it’s for 1 second. You need to be able to have that power so that your house has what it needs to operate. Whether it’s your air-conditioning kicking on or whatever.

Some utilities, you may opt for a rate plan where you’re going to get charged for your instantaneous load to the system, to the grid, your number of kilowatts that you’ve used. That rate tariff will work because they’ll take your maximum number of kilowatts that you’ve used for say, a 15 minute period is how most commercial billing systems rate plans work. For residential, I think it’s usually an hour. So say for 1 hour you used 8 kilowatts, which is quite a lot, then you are going to get billed for a unit of cost, say $15 times 8 kilowatts that was your maximum for that month. Even if it’s just a 1 hour period that you did it and you never did it again.

In addition to that on your bill, you’re going to have a cost for kilowatt hours. So, if you used that 8 kilowatts for 1 hour, that is 8 kilowatt hours that you are also going to get billed for. Maybe your cost is 15¢ for each kilowatt hour. That obviously varies a lot. You might be using 8 kilowatts for 2 minutes, then you go back to 1 kilowatt, well over time it all adds up. Your amount of kilowatts per time is going to add up.

Most residential rate plans only use kilowatt hours. If you’re on solar you only want kilowatt hours. You don’t want Demand. Demand being the kilowatts.

The reason is this, your solar is going to offset your energy use obviously. When you have kilowatts, your solar system produces kilowatt hours. Your house uses kilowatt hours. You don’t want to be billed for kilowatts. Because, yes, when your solar is producing, you’re going to be offsetting your kilowatts because you are going to be getting some of your solar and you might be getting some from the grid. But, overall, you’re going to be using less kilowatts from the grid.

What happens when you have 1 cloudy day and your demand goes up for that 1 day when your solar wasn’t producing all that much? You’re still going to get billed for that 1 hour, that’s all it takes to max out your kilowatts. Solar isn’t guaranteed to off set your Demand, your kilowatts, because you could have 1 cloudy day.

When you have solar producing kilowatt hours, you want to have a rate plan with your utility where you are really using kilowatt hours. So, your solar is directly offsetting those kilowatt hours. Even on a cloudy day when you need kilowatt hours, your system is going to produce kilowatt hours. It may be less that day, but you’re still producing them.

With a commercial rate plan, you don’t have a choice. Most commercial plans for a medium sized building or a large building or a super large building are going to have demand costs. When I price out a system for somebody, I can’t just take their whole bill that they spent that month and divide out their kilowatt hours and call it 15¢ a kilowatt hour. I cannot guarantee that I can offset their demand, because they could have a 15 minute period where they use more power. They blow their Demand, essentially. I have to remove out of the equation the cost of their kilowatts and then determine how much their kilowatt hours costs. That is a consideration I have to make when I am sizing a commercial system or calculating the return on investment.

That is a little bit about the difference between kilowatt hours and kilowatts. You want a rate plan, if possible, to be just based on kilowatt hours if you’re going to have solar.

I hoped that helps. I hope I didn’t mis-speak, because it’s really easy to accidentally reverse those 2 phrases. If I did, let me know & I’ll fix it. That is the big difference, kilowatts and kilowatt hours.

This is Dillon. You’re listening to the Cambio Energy Solar Power Podcast. Keep the questions coming. Thanks a lot.

Cambio Energy Solar Energy Podcast

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