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When we talk about the solar panels for your home and how they can save you money, there are a few terms that often get thrown around and used incorrectly. Since the goal of going solar (among other things) is to cut your electricity bills, understanding the difference between “Power” and “Energy” is crucial to achieving solar success.

Power is the rate at which energy is consumed and is measured in watts. 1,000 Watts is equal to 1 kilowatt of power.

Energy is the total consumption of power over a given time – typically per hour. The unit of energy is in watt-hours (Wh) or kilowatt-hours (kWh).

So the governing equation that relates these two similar, but distinct terms is as follows:

Energy = Power x Time

To illustrate this relationship, let’s use a couple of real-world examples. You’re probably no stranger to your monthly utility bills you receive, but how exactly is that cost calculated?

In your home, you’re using all manner of devices that need electricity to operate. Your lights need electricity to shine, your television needs electricity to display your favorite movie, and even that awesome lava lamp you can’t live without is drawing electricity to…well…be awesome.

Let’s say you have a 60 W light bulb. Since power is measured in watts, we know that the light bulb uses 60 watts of power. So now let’s say you’ve just finished a movie marathon of the first 5 “A Nightmare on Elm Street” films. Total runtime is just about 8 hours (I know from personal experience), and understandably you left this 60 W light bulb on the whole time.

So all together you used 480 watt-hours for the light bulb (60 watts x 8 hours). or 0.48 kWh of energy.

This is the number for which you will be charged by your utility. If you add up all the energy in kWh used during your billing cycle, that is – your TV usage, the lights, devices, etc., this will be the number multiplied by your local utility’s rate. Your bill will then reflect the amount of energy purchased, plus whatever additional fees your utility lumps in with electricity costs.

Why this Matters for Residential Solar Panels

Every solar module you see comes with a nominal power rating that reflects its ideal power output given standard testing conditions. So you will see solar panels (modules) rated for 250 W, 300 W, 350 W, etc.

So given the same amount of time, two panels with different power outputs will produce different levels of energy. Similarly, you could achieve the same desired energy production using more panels of a lower power rating.

For example, if you wanted to produce 1,500 Wh of energy, you could accomplish this by having five 300 W panels operating for an hour or six 250 W panels operating for an hour. You could also produce this amount of energy if you had a 1 W panel that operated for 1,500 hours.

Keep in mind, these numbers are all under ideal test conditions and the amount of power generated varies in real world application. Determining the number of solar panels you will need to offset your energy usage is dependent on available roof space and the relative solar panel efficiency at a given location.

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