kW is a measurement of electricity demand, while kWh is a measure of electricity usage or electric demand over time. To best understand the difference between kW and kWh, one must understand how energy consumption is measured. Below, we will define Kilowatts (kW) and Kilowatt-Hours (kWh) and the difference between the two.

kW, kWh, and Their Differences

In order to fully understand the electrical terms kW and kWh, we must explore how electricity is physically consumed in a building. Although closely related, kW and kWh measure different aspects of business electricity consumption and the distinction between the two is important to know when developing an energy strategy, or when you’re simply trying to conserve energy costs.

What Is kW

A kW is a measurement of electricity demand, or the amount of power being used at any given time. kW, or kilowatts, measure the total amount of power needed to keep appliances in your home or motors in your businesses running. And, it does not matter how long the motors are running. kW is simply a measurement of the amount of electricity needed to power a piece of equipment.

What Is kWh

A kWh is a measure of electricity usage over time. To calculate kWh, you take the kW measurement and multiply it by the number of hours the appliance was used. For example, that 15 kW hot water heater running for one hour would use 15 kWh of electric energy (15 kW X 60 Minutes = 900 kWh).

The total amount of energy consumed in kiloWatt-hours is what’s reported on your utility bill under Electricity Usage/Demand Charges each month.

How Many kW Is In A kWh

Using the above definitions, we now understand that kW and kWh are different units of electricity measurement. While kW measures the total amount of power demanded by a motor, or an entire building, kWh measures how much electricity is consumed over time.

It is impossible to calculate how many kW make up a kWh because the total amount of kWh is a measurement of kW over time. The best equation to use to understand this is:

kWh = kW / time

What Does kWh & kW Mean For Your Business

If you’re looking to save money on your monthly electricity bill, understanding Kilowatt-Hour (kWh) usage is essential. By tracking your kWh consumption and making small changes in your appliance use, you can start shaving dollars off of your monthly expenses.


Understanding kWh usage can also help you make smart decisions about home upgrades and energy conservation. For example, if you’re considering installing a new air conditioning unit, knowing the kWh consumption of your current unit can help you determine if the new air conditioning unit will be a cost-effective upgrade. In addition, knowing the rate you pay per kWh is important to saving money. Your energy broker can help you calculate this and offer new price options that might be lower.

Kilowatt-Hour kWh usage can also give you an idea of how much energy your household appliances or business equipment is using on average, which is helpful for setting up energy alerts. By becoming more aware of your Kilowatt-Hour (kWh) consumption, you can take the necessary steps to save money on your energy bill.

Furthermore, when you are shopping for a retail electricity rate from an energy supplier, the price is often quoted in $/kWh – especially for fixed-rate offerings. Understanding your annual kWh consumption will give you a good idea of how much you will pay for electricity after locking into a fixed electricity rate contract.


Controlling energy demand, or kW, on the other hand, can be instrumental in reducing total energy expenditures and becoming more energy efficient. Since kW is a measurement of a building’s total peak energy demand, there are several ways to reduce kW:

  • Invest in energy efficient equipment
  • Conduct an energy audit to look for ways to reduce demand
  • Enroll in a demand response program
  • Educate employees on energy efficiency measures

Reducing peak kW can benefit your electricity bill in several ways. Your kW reading impacts how your electricity delivery charges are calculated by the local utility. In fact, each utility company has a tariff schedule that outlines how delivery charges are calculated based on a building’s kW ratings.

Furthermore, several parts of your electricity supply rate are calculated using kW. Although retail energy suppliers bill you in $/kWh, part of their costs are impacted by your business’s energy demand in kW.

Certain supply charges, such as electricity transmission and power capacity, are measured using kW. If you are successful in reducing your businesses kW, you could benefit in several additional ways:

  • Improve your load factor rating
  • Qualify for lower energy supply rates
  • Consume less energy in your business

How Can I Reduce My kWh Consumption?

There are several ways to reduce your kWh consumption. One of the simplest methods is to use appliances with lower wattages. This might mean replacing light bulbs with LED bulbs that use less electricity or by replacing older motors and appliances with upgraded, energy-efficient models.

You can also try using appliances more efficiently by turning them off when they’re not in use. Educating your employees about being more energy-conscious is a great starting point for improving energy efficiency in your business. You can also try to turn off HVAC units in parts of the building that are unoccupied.

Finally, make sure to schedule your heavy-duty appliances for when you’re not using other appliances. That way, you’ll avoid peak market hours and save money on your electricity bill. Since peak kW is measured by the total amount of power being demanded at any given time, staggering motors so they are not demanding energy at once will reduce your peak kW, and ultimately allow you to use less kilowatt hours.

Do You Need Help Becoming More Energy Efficient?

Understanding the difference between kW and kWh is a great starting point to reduce energy expenses at your business, but having a business energy plan in place is critical to cutting costs. Our team of energy professionals has decades of experience developing energy efficiency strategies and energy supply solutions that deliver lower-cost energy. Contact us today to get started.

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