If you’ve been thinking about your energy costs lately, you may be looking into energy efficiency upgrades for your home such as installing solar panels, adding smart thermostats or pursuing an EnergyStar home certification. And when comparing various energy solutions and the prices for new options, you’re going to hear one metric used incessantly: kilowatt-hour (kWh). So what exactly does a kWh mean and how does it differ from a kilowatt (kW)?

## Kilowatt-hours (kWh) and Kilowatts (kW) explained

A kilowatt is a metric that equals 1,000 watts of power. Wattage, in turn, indicates how much power a device can provide over a relative amount of time. Thus, a 1,000 watt (1 kW) microwave will warm up a meal much faster than a 600 watt microwave. Because of this relationship between capacity and time, we use the terms *watt-hours (Wh)* or *kilowatt-hours (kWh)* to describe energy use.

Watt-hours and kilowatt-hours define the amount of work performed or energy used in one hour of time. A simple analogy is that **speed** is a metric that defines **distance travelled** over a **period of time** while **energy** is a metric that defines **power used** over a **period of time**. Using that same 1,000-watt (1 kW) microwave for an hour would use up 1 kilowatt-hour (kWh) of energy.

Watts and kilowatts refer to different quantities of the same thing – energy. The next step up from a kilowatt is a *megawatt.* 1 megawatt is equal to 1,000 kilowatts or 1 million watts, and the same conversion applies for megawatt-hours and kilowatt-hours. Thus, if a 1,000 watt (1 kW) microwave is left running for 41.6 days straight, it would use up 1 megawatt-hour of energy (1,000 watts/24 hours per day = 41.6 days).

## How to understand energy use and kWh in context

In order to really comprehend kWh and MWh it’s important to understand the context for when these metrics are used. For example, the average U.S. household uses 11,000 kWh of energy each year (according to the latest data from the Energy Information Administration). Using that information, we can estimate that monthly energy use is roughly 915 kWh and daily energy use is about 30 kWh for the average home in the United States.

When talking about residential energy use, it is most common to use kilowatt-hours. Your monthly energy bill will report your usage with this metric, and when evaluating energy upgrades such as a solar installation, companies will talk about what size your system would need to be in kW in order to meet your kWh needs.

By comparison, MWh are typically used in reference to larger-scale electricity use such as a new power plant being built or an entire town or city launching an energy upgrade. In one of these scenarios where energy use is being discussed at great scale, the terminology of choice will be megawatt-hours or even gigawatt-hours (GWh), which refers to one billion watts of power.

## Why kWh matter when you’re going solar

When you look at your solar options, you will need to determine whether or not the system you buy is powerful enough to completely offset your energy needs. This is where kilowatts and kilowatt-hours come in: paired with another data point known as the “solar panel production ratio,” they make it possible to size your system accurately.

In the earlier example, we talked about how a 1,000 watt microwave will use 1 kilowatt-hour in one hour of use. When talking about solar, the process of converting power capacity (watts) into expected energy output (kWh) is not as simple due to a number of factors. One thing is certain: a microwave will produce power at a constant rate regardless of whether or not you live in California, if it’s raining or if it’s placed on a certain type of countertop. With solar panels, on the other hand, the environment and circumstances will greatly impact the panel’s rate of output.

### The kWh formula for solar energy conversion

The solar panel production ratio (also referred to as the solar performance ratio) is a coefficient that factors in how suitable your roof and location will be for solar, allowing you to accurately size your solar system. Factors such as the angle and orientation of your roof and the amount of sunlight hours in your town or state will significantly impact how your solar array performs. The solar panel production ratio is a metric that allows you to estimate your needed solar system size and the expected hours of energy that it will produce. So, for example, a solar panel on the north side of a roof will have a much lower production ratio than the same panel on the south side of the roof because south facing roofs typically receive higher sunlight exposure. The kilowatt-hour formula to use for conversion is the following:

**Solar array system size (kW) = Annual energy needs (kWh) / solar panel production ratio**

Thus, if your household uses 11,000 kWh per year (the national average) and your location and roof type will offer a 1.57 solar production ratio, you’ll need about a 7 kW solar system to offset your energy needs.

For those looking for a ballpark estimate as to what a solar installation would cost for their home, try our Solar Calculator for some instant insight. If you want customized system designs for your home, the best place to get more information is through a reputable solar installer. They can help you estimate your home’s potential for solar, how much a solar panel system will produce at your home, and how much it will cost. If you are interested in receiving quotes from pre-vetted, solar installers in your area, check out the EnergySage Solar Marketplace.