kW vs kWh: rate of draw versus quantity consumed

The definitions

A kilowatt is power: the rate at which electricity is being drawn right now. A 1,500-watt heater draws 1.5 kW while it is running.

A kilowatt-hour is energy: a quantity. One kilowatt drawn for one hour equals one kilowatt-hour. That 1.5 kW heater running for four hours consumes 6 kWh.

kWh = kW x hours

Why commercial bills charge for both

Residential bills generally charge only for kWh. Most commercial bills above a certain size charge for both, because the utility incurs two different kinds of cost.

Fuel and generation scale with quantity, so they are recovered through a kWh charge. Wires, transformers and substations have to be sized for your maximum draw regardless of how often you reach it, so that capacity cost is recovered through a kW demand charge.

The practical consequence: an efficiency measure that reduces kWh may not reduce kW at all, and vice versa.

Related units you will meet

• MW and MWh — megawatts and megawatt-hours, one thousand times the kilowatt units. Used for large accounts and wholesale markets.
• kVA — kilovolt-amperes, apparent power. On sites with significant motor load, kVA and kW diverge, and the ratio between them is power factor.
• kVAR — reactive power, the component that does no useful work but still has to be delivered.

The mistake this prevents

A business is quoted a supply rate in cents per kWh and assumes that multiplying it by annual consumption gives an annual bill. On a demand-metered commercial account it does not, because it omits the demand charge, the fixed charges and the riders entirely.

The gap is not small. On a low load factor account, the kWh-only calculation can understate the real bill substantially — and it is exactly the calculation a supply quote invites you to make.

Common questions

What is the difference between kW and kWh?

A kilowatt is a rate of electricity draw at a moment in time. A kilowatt-hour is a quantity of electricity consumed over time: one kilowatt drawn for one hour.

How do I convert kW to kWh?

Multiply the kilowatts by the number of hours the load ran. A 5 kW load running for three hours consumes 15 kWh.

Why does my commercial bill charge for kW and kWh?

Because the utility incurs two different costs. Generation scales with quantity and is recovered through kWh charges, while infrastructure must be sized for peak draw and is recovered through kW demand charges.

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