When measuring electricity use, two different measurements are typically used: the rate at which electricity is being consumed (kW), and the amount of electricity that has been consumed (kWh).

Kilowatts (kW) are used to measure the rate at which electricity is being consumed by a building. This rate is sometimes also called that building’s demand for electricity, or just “demand” for short. kW values can either be average demand over a period of time, or they can be a snapshot of a building’s rate of electricity consumption at a single moment in time, which is often referred to as instantaneous demand. For example, if you said, “Right now this building is consuming electricity at a rate of 23 kW” you would be referring to the building’s instantaneous demand.

Above: A building's rate of electricity consumption (i.e., demand) changes over the course of the day.

In this example, the building’s demand changes dramatically over the course of the day, ranging from a low of just about 10 kW in the evenings to a high of about 60 kW at 8:30 AM. This is typical, and is generally a sign of a well-managed building since it indicates that the building is consuming less during the evening hours when it is not occupied.

You can think of the rate at which a building consumes electricity (measured in kW) as being similar to the rate at which a car consumes gasoline (measured in gallons per hour).

Kilowatts can also be used to measure the rate at which electricity is being produced. For example, all solar PV arrays come with a kW rating that indicates the maximum rate at which they can produce electricity. The actual rate at which the array is producing electricity depends on weather, time of day, and day of year (which impacts the sun’s position in the sky), the cleanliness of the panels, and other factors. Take a look at this graph, which shows solar PV production on a mostly sunny day:

Above: A solar PV array's rate of electricity production changes over the course of this sunny day.

And here’s another graph showing production from the exact same point a few days later, when the weather was much cloudier:

Above: The rate of electricity production for the same solar PV array on a cloudy day.

As you can see, the peak rate at which the PV array was producing electricity was much higher on the sunny day (approximately 58 kW) than on the cloudy day (approximately 31 kW). On both days, the PV array produces electricity at a rate of 0 kW at night when the sun is not out.

Electricity demand (and rate of production) can also be measured in units other than kilowatts. For example:

Kilowatts are the standard unit for most situations. Megawatts and gigawatts are only used when discussing very high rates of electricity consumption or production, such as the rate at which a power plant produces electricity, or the rate at which an entire city or state is consuming electricity.

Kilowatt-hours (kWh) are used to measure the amount of electricity consumed by a building during a specific period of time. For example, you might say, “Today this building consumed 3,528 kWh.”

If we look at the same graph shown above (of a single day’s worth of real-time data for a building), the orange shaded area under the line is the amount of electricity (kWh) the building consumed.

Above: The amount of electricity consumed is the orange shaded area under the line.

You can think of the amount of electricity consumed by a building (measured in kWh) as being similar to the amount of gasoline consumed by a car (measured in gallons). In the same way that you pay for gas based on how many gallons you purchase, the amount you pay on your electricity bill each month is mostly dependent on the number of kilowatt-hours you consumed during that month. The price of 1 kWh of electricity in the United States and Canada is typically between $0.05 and $0.25. Actual kWh prices can vary by region, type of buildings (industrial facilities often pay lower rates than homes and apartments), time of day, date of week, season, and other factors.

Electricity consumption and production can also be measured in units other than kilowatts. For example:

Kilowatt-hours are the standard unit for most situations. Megawatt-hours and gigawatt-hours are only used when discussing very large amounts of electricity, such as the electricity produced by a power plant, or the consumption of a very large building over a long period of time.

As you might have guessed, there is a relationship between kW and kWh:

Rate x Time = Amount
​Kilowatts x Hours = Kilowatt-hours

Multiplying the rate at which electricity was consumed by the number of hours it was consumed will give you the total amount of electricity used. Thus, if a building’s average rate of electricity consumption over one day was 147 kW, you could calculate the total electricity consumed by the building during that day:

147 kilowatts x 24 hours = 3,528 kilowatt-hours

Returning to our analogy of the rate and amount of gas consumed by a car:

Gallons/hour x Hours = Gallons

Notice that the units are balanced on both sides of this equation and on both sides of the kW x hours = kWh equation.