Kilowatt-Hours (kWh) Explained: Understanding Your Energy Usage

Watts, kilowatts, kilowatt-hours, price per kWh: For most people over the past few years, those terms have shown up on a higher electric bill. But, what is a kilowatt-hour? 

Whether you're considering a move to solar for your home, or just want to lower your monthly bill, understanding why your electric bill is what it is each month could be helpful. This article will explain all you need to know about kilowatt-hours and how you can cut your power usage and electric bill.

What is kWh a Measure Of?

Kilowatt-hours are a measurement of electric power, commonly used to quantify home electricity consumption, solar energy production, or EV battery capacity in the United States. 

Breaking down kWh measurements piece-by-piece, a kilowatt is a unit of energy equal to 1,000 watts and an hour is… well, an hour, or sixty minutes. Therefore, a kilowatt-hour is the amount of energy equal to 1,000 watts generated, transferred, or consumed over a one-hour time period. 

What is 1 kWh of Electricity Equal To?

To understand what 1 kWh of electricity is equal to, two key components of the equation must be considered: 

1. The electric device’s wattage
2. The run-time

For instance, let’s say you need to run a 500-watt device. If you power this device for 1 hour, then 500 watt-hours (or 0.5 kWh) will be consumed. Then after another hour, 1 kWh (1,000 watt-hours) in total will be used. Likewise, a 2 kW (or 2,000-watt) device would consume 1 kWh of electricity in just 30 minutes. 

To illustrate a few real-life examples, here is a look at the wattages of typical home devices and the approximate rate at which each appliance or electronic would consume 1 kWh of electricity while in use.  

Note: The table above is designed to show typical kWh consumption for home appliances and electronics. Actual kWh will vary by appliance make, model, efficiency, and age. 

Monthly Electric Bills and kWhs

In the United States, the average home consumes approximately 900 kWh of electricity each month to power appliances, lights, and other electronics. However, electricity bill consumption varies for every homeowner and is primarily impacted by the size of the home, efficiency of appliances, time of year, and ongoing energy habits.  

How many kWh per day is normal?

Knowing the average American home consumes around 10,800 kWh annually, roughly 29.5 kWh could be considered normal on any given day of the year. Nationally, kWh consumption is typically highest during the summer and winter months, which is largely attributed to the power required to run electric heating and cooling systems. 

Daily kWh consumption also varies heavily throughout different states and regions, mainly driven by climate considerations. The highest averages for home electricity use in the US can be found all across the hot and humid South, including high daily consumption rates (>35 kWh per day) in Alabama, Mississippi, Louisiana, and surrounding states.  

How do you calculate cost per kWh?

To calculate the kWh rate you pay for electricity, simply divide your total utility bill (minus any flat fees or taxes) by your total power consumption. The kWh rate your utility charges may also be displayed next to the consumption recorded on your electricity bill. 

In some parts of the country, electricity rates will vary throughout the day, week, and year. Known as TOU rates or demand-based pricing, utilities with these cost models will charge higher rates for kWh consumption during peak billing hours, which usually occur in the late afternoon and early evening. To reduce spending within these billing structures, homeowners can shift heavy electric loads from high-wattage appliances outside of peak demand hours. 

Average cost per kWh in the US

According to the most recent State Electricity Profile from the EIA (US Energy Information Administration), the average cost of residential electricity in the US was 16.41 cents per kWh in June 2024. Hawaii (42.45 cents) and California (32.99) have the highest rates. Louisiana (11.42) and Utah (11.50) are the states with the lowest rates. The residential electricity rate average was 12.36 in 2022 and 11.10 in 2021.

Solar Panel kWh Explained  

Just as the kWh you purchase from the utility are charged to your electricity bill, the kWh your solar panels produce can be credited to your account, lowering your monthly energy costs. The value at which the solar kWh you export to the grid are redeemed will depend on the terms of your utility’s net metering or net billing structure.

Calculating solar kWh is a lot like calculating electricity consumption, in that the main factors are the panels’ wattage and time. Although there are many other factors that influence solar production efficiency (such as sunlight intensity and system age) you can calculate approximate solar kWh with the formula: Total System Wattage x Number of Peak Sun Hours.

So in ideal operating conditions, a 6.8 kW (6,800 watt) solar energy system may produce roughly 34 kWh of electricity daily, when installed in an area that receives 5 peak sun hours per day. As the number of peak sunlight hours your property receives is dependent on the season, the same set of solar panels will produce various amounts of electricity throughout the year. Both daily and annual solar kWh estimates can be easily calculated during a home solar assessment.   

Learn More About How Solar Can Transform Your Electric Bill 

If paying less to your utility company and saving money overall are reasons you’re thinking about solar, it’s important to look at both the short-term and long-term financial benefits. Maximizing your usage of your own solar energy, primarily by adding battery storage to your system, is a definite factor in cutting your old-school electric bill as much as possible. When you have stored energy for reliable use when solar can’t be generated (mostly, each night), you’re using grid electricity as little as possible. 

Two other ways you can save money are net metering and time-of-use plans. Net metering allows you to give excess energy to the utility company for a credit on your electric bill. Time-of-use plans give you lower rates for aligning your energy usage away from peak hours. 

If you are interested in learning more about how solar energy can reduce the number of kWh you purchase from the utility each month, reach out to a home energy expert at Palmetto. Or, if you’d like to get an estimate even quicker, you can calculate your solar savings today.

Still want to learn more about kWh? Here are a few related articles to explore:

• The Palmetto Solar Energy Glossary
• How Many Solar Panels Are Needed to Power Home Appliances?
• How Solar Panels Can Help You Save On Your Electric Bill

Kilowatt-hour FAQs

What is a simple definition for a kilowatt-hour?

A kilowatt is 1,000 watts and a kilowatt-hour is a measure of 1,000 watts, produced or consumed, over one hour. 

How many kilowatt-hours does a typical home use?

In 2022, residential electric customers in the US averaged 10,791 kWh used a year, or about 899 kWh a month.

How many kWhs does an air conditioner use?

A central air conditioner with an average wattage of 4,000 watts and uses 1kWh per 15 minutes of running, or 4 kWhs per hour.

How do I choose the right solar energy system for my home?

The right system for your home will depend on numerous factors, including your current electricity usage, the size and layout of your roof, and your preferred level of energy independence. Palmetto will work with you to outline estimated costs, environmental impact, monthly savings, and long-term savings based on system sizes that work with your roof. Should you choose to invest, we’ll design a solution to meet your goals and maximize your savings.

About the AuthorAndrew GiermakWriter and Editor

Andrew joined Palmetto in Charlotte in August 2024. He’s been a writer in journalism, then in business, going back to almost the 20th century. He’s lived in Indiana, Virginia, Pennsylvania, Virginia again, and now North Carolina for the last 12 years. He likes golf. Is he good at it? Not so much.