How is a kilowatt-hour (kWh) calculated? How's it different from a kilowatt? What does all of this have to do with running home appliances?
Ah, power and energy - two words that are often confused and misused, much to the chagrin of engineers and physicists everywhere. Many (or most?) of us throw these terms around interchangeably, but their meaning is quite different, and that difference is tantamount to money out of your pocket when it comes to utility billing.
Think of power as a snapshot of the current muscle needed to run your home's electrical appliances at a given moment. It's like a speedometer...that's what's going on at the given instant. A common measurement of power is watts, or kilowatts, which is simply 1,000 watts. Energy, on the other hand, is power used over a span of time, much like an odometer is the cumulative total of miles over a given amount of time. 75 miles/hour x 1 hour = 75 miles. Electric utilities bill consumers based on energy, so this is the one to look out for. Their unit of time is normally kilowatts used over an hour's time. So, if a light bulb needs 10 watts to run (quite a bargain these days, isn't it?), over the course of an hour, it needs 10 watts x 24 hours = 240 watt-hours. But wait, energy is billed in kilowatt-hours. Right, so 240 watt-hours x (1 kWh/1,000 kWh) = .240 kilowatt-hours (kWh). Assuming your energy rate is $.10/kWh (lucky you, Washington State resident...https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a), your spend per day to run this light bulb is .240 kWh x $.10/kWh) = $.024. So, you're living better than a 19th-century king (who didn't have electric lights) for around 2 cents a day.
Of course, not everything runs on 2 cents a day, and not everyone lives in Washington State, or Nebraska, or North Dakota, and that's probably why you're reading this. Kilowatt-hours add up for most home appliances, and Kilowatt-hours cost real money in most areas. Many (in fact most) things we use are a rounding error to our monthly budget (e.g., coffee makers or microwave ovens). But, as we as a society are weaning off of fossil fuels...we're electrifying more expensive things to run like our heating and our cars. See the chart below.
Some home appliances like computers run long, but they don't run hard (needing a lot of running power). Some home appliances like microwaves run hard, but they don't run long. Electric water heaters, air conditioners/heat pumps, and car chargers run long and they run hard. Overall, the good news is that these larger newfound electric friends may actually run for less money than on fossil fuels. Electric cars, for instance, may have a higher upfront cost than an internal combustion engine ride, but their actual running cost per mile is around half the cost of running a 30 mpg car (assuming $.15/kWh for electricity and $3.45/gallon for gas, which is in line with current national averages). But how can we reduce our electric bill even further?
First, before answer this, there is a time when power (kilowatts) does matter: For commercial power users. Where the use of a single household's power (and energy) consumption is but a drop in the bucket for local utilities, the power requirements and energy needs of larger commercial entities can make quite a dent. Imagine if you're running a utility, and you have a larger automotive plant to which you are contractually obligated to supply power. It's summer at 2:34 pm. They're busy. They have the air conditioning and all of the machines cranking. In this case, when being amalgamated with a few similar other large entities, set aside the power demands of the rest of the grid, power is more important than energy. Why? Because power is an absolute requirement, and the grid has finite resources. Sure, as a homeowner, you never (or hopefully never) need to worry if the grid can power your air conditioner. But, utility operators worry about peak demand days, and they, in effect, push the worst offenders (which, by the way, are also their biggest customers) for using power at these peak times by instituting what are called 'demand charges' and 'facility charges.' Demand charges look at the power requirement (in kW), not the energy (in kWh) of commercial entities. They may even look at a single 15-minute period in, say, July when the entity required the most power for the whole year and i) have a power demand charge for this one time ii) have a facility charge for each month base on this one time. Is it fair? Well, the utility doesn't want a blackout or a brownout, so drastic times call for these drastic measures. Most commercial entities have some type of power requirement charge, and the larger commercial utility customers have a larger percentage of their local utility bill to go toward power, not energy. Some up to 40% of their overall utility bill.
Bonus Section: A case for solar (+ storage) and why both energy and power are important in this case
So, what does this power stuff have to do with you, as a residential grid user? Well, lots of people are employing solar, or solar with batteries, for running their homes, since the cost of both are coming down precipitously. And this is when power matters. Why? Because, like a big utility, you need to worry about the startup power of your appliances, since you are now, in effect, your own utility company if you've made the leap to off-grid. If you're net metered, this doesn't apply to you, but net metering is becoming more contentious. Utilities don't want to pay for excess power your system generates in many parts of the country.
The startup power for LED lights take, for just a millisecond, around 50 to 100x their running energy when they first start. And a heat pump may need 4 to 6 times its running power for the surge, or inrush current, of first getting its compressor motor turning, for around 300 milliseconds. These tiny time periods won't affect your energy use, since the time period is so tiny for which these systems are running at this high power. But, well, similar to the utility, without that power available, nothing's going to start. If you're off grid, and you want to start a traditional heat pump or air conditioner, instead of needing the 3,500 watts (3.5 kW) running power, you may need 20,000 watt (20 kW). It's crazy, but without the grid, it's really expensive to get many appliances start. It seems like a waste to have enough so many extra batteries and solar panels. The good news? Appliance makers are now offering motors (such as inverter compressors on heat pumps) which start slow and avoid this inrush period all together.
Many speculate that the house of the future will be DC, the same power as solar panels create, since many appliances (computers, inverter heat pumps, TVs) are inherently DC. So, kilowatt-hours, and kilowatts, may in the future more easily come from solar. If we can do that, we'll be living in a cleaner, greener, and more-affordable powered (and energized) environment.