Power vs. Energy: Understanding the Difference Between kW and kWh on a Utility Bill


The market for solar power is growing faster than ever in sunny California. So is solar power worth it? The answer to that question is a big YES.

Going solar has become a key strategic decision for businesses who want to save money while saving the planet. Solar panel costs are dropping and businesses are discovering the benefits of going solar. As a result, businesses are on a quest to identify reputable solar panel companies to join the solar revolution once and for all.

When comparing prices from solar panel companies, you will need to determine whether or not the system you buy is powerful enough to completely offset your energy needs. A common challenge that businesses face today is understanding charges on their utility bills. This goes beyond knowing how much solar panels cost. At Solar Optimum, we believe that keeping track of energy costs for your business needs should be simple and accurate for our clients so they can focus on what they do best: growing their business successfully. So how can you distinguish between the different charges on your utility bill?

In order to read monthly utility bills correctly, it is important to comprehend the two very different types of billing. This is where the two metrics kilowatts (kW) and kilowatt-hours (kWh) come in. But what exactly does kWh mean and how does it differ from a kW?

A brief deep dive into physics shows us that kWh is a measure of energy, whilst kW is a measure of power. Power (kW) is the rate at which energy is generated or used (1). Power only refers to the rate at which electricity is generated, not the amount of energy that it can generate in a certain period of time. This term is often used to express electricity usage. Energy (kWh), on the other hand, is a measure of how much fuel is contained within something, or used by something over a specific period of time. This term is often used to express solar energy usage. As we can see, power and energy are related to each other, but energy also factors in time. For solar systems, the element of time is crucial to its performance to generate energy. This means that your solar panel system has everything to do with energy (kWh) and can offset a certain amount of kWh per year for your home or business. So why is time such an important factor in solar energy production?

Solar panels generate a certain amount of electricity for every minute they are exposed to the sunshine. Logically, this number is dependent on the amount of sunlight exposure solar panels receive on a daily basis. With solar panels, environment and circumstances will greatly impact the panel’s rate of output. Factors such as the angle and orientation of your roof, the amount of sunlight hours in your town or state and shade on solar panels will significantly impact how your solar array performs. Therefore, it is crucial to remember that by going solar you only offset kWh, not kW, meaning that solar reduces the cost of your energy needs – but likely not the cost of your power needs.

That is why we provide a real in-depth analysis which clarifies the different types of charges on utility bills. This transparency is a huge advantage over blended analyses provided by other solar companies. Having access to accurate information helps our clients leverage the big potential of going solar and adjust their energy needs accordingly so that the sun works for them, not vice versa.

Ara Krikorian, VP of Commercial Development at Solar Optimum, states: “Solar Optimum does a very robust analysis of ever client’s utility bills; we don’t blend kW and kWh. Our experts use third party financial analysis software, which continuously updates the utilities’ rate schedules, producing an accurate analysis that gives customers peace of mind. That is how every project’s pro forma analysis matches with the actual system’s performance a year after – that’s what a client really wants.”

Based on this information, the smartest decision for your business will be choosing a solar panel company that understands the nuances of solar and the utility’s billing methods. Here at Solar Optimum we are committed to providing accurate data to ensure that your solar decision is a triple win that comes with financial, social and environmental benefits for you, and your business.

There’s no better time than now to start thinking about buying solar panels for your business. As one of the most trusted solar panel companies in all of California, we take pride in having built one of the most dedicated and proven teams in the industry and being part of our clients’ growing businesses and success. Contact Solar Optimum at (888) 276-5270 or visit https://www.solaroptimum.com for a FREE commercial quote.

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