What is the difference between kW and kWh?

kW and kWh look similar and get confused constantly, but they measure two different things. Getting them mixed up is the reason people misjudge running costs, misread appliance labels, or misunderstand why a high-powered piece of equipment does not always mean a high energy bill. This guide sets out the difference plainly, with a worked example, then covers the related units you will meet on a business energy bill.

What is the difference between kW and kWh?

A kilowatt (kW) is a rate, describing how fast you are using or generating electricity at a given moment. A kilowatt-hour (kWh) is a quantity, describing how much energy has actually been used or generated over a period of time. Ofgem’s own glossary of energy terms defines a kilowatt-hour as “one kilowatt of power being used for one hour,” which is the cleanest way to see the relationship: kW is the speed, kWh is the distance covered.

A simple comparison: think of kW as a speedometer reading and kWh as the distance shown on the odometer. A car travelling at a steady speed for longer covers more distance, in the same way that a device drawing a steady amount of power for longer uses more energy. Your business energy bill charges you for the distance travelled (kWh), not the speed you were going (kW), because that is what actually costs your supplier money to generate and deliver.

Where does kW sit on the scale of power units?

Power is measured in watts, and kW is simply 1,000 of them. The same prefixes scale up for larger sites and for national statistics:

Unit	Equal to	Typical use
Watt (W)	1 W	Small electronics, light bulbs
Kilowatt (kW)	1,000 W	Business equipment, heaters, small generation such as solar arrays
Megawatt (MW)	1,000 kW	Large sites, power stations, big commercial solar or wind installations
Gigawatt (GW)	1,000 MW	National generation and demand figures

Solar panels are a common source of confusion, because installers quote the size of an array in kW (its maximum generating rate under ideal conditions), while the electricity it actually produces over a day, month or year is measured in kWh, and depends on weather, daylight hours and the season. Our guide to commercial solar panels covers this distinction as it applies to on-site generation.

What is a kilowatt (kW)?

A kilowatt is a unit of power equal to 1,000 watts. It describes the rate at which an appliance, machine or generator is drawing or producing electricity right now, regardless of how long it runs for. A 3kW heater draws power at three times the rate of a 1kW heater, whether either of them is switched on for five minutes or five hours.

Power ratings like this appear on appliance nameplates, equipment specifications and, for larger sites, in discussions about your agreed supply capacity, which sets the maximum rate of demand your connection is designed to support.

What is a kilowatt-hour (kWh)?

A kilowatt-hour is a unit of energy: the amount used when one kilowatt of power is drawn continuously for one hour. Ofgem’s glossary also notes that a kWh is “also known as a ‘unit’ of energy,” a term you will still see on some bills and in older contracts. Both gas and electricity are billed in kWh in the UK, which is what lets you compare the cost of very different fuels on the same basis.

How do you convert kW to kWh?

Multiply the power rating in kW by the number of hours it runs. This is an illustrative example, not a real reading: a 2kW appliance run for 3 hours uses 2 x 3 = 6kWh. The same appliance run for 30 minutes instead would use 2 x 0.5 = 1kWh, because kWh always reflects both the rate and the time together, not either one on its own.

Appliance rating (example)	Running time (example)	Energy used (kWh)
1kW	1 hour	1kWh
1kW	24 hours	24kWh
3kW	20 minutes	1kWh
5kW	2 hours	10kWh

These figures are for illustration only. Real appliance draw varies over the time it runs (a motor starting up, a heating element cycling on and off), so a nameplate rating multiplied by hours gives an estimate, not a precise reading of actual consumption. Where you need an exact figure, a meter reading or a plug-in energy monitor gives the real result.

The same arithmetic works in reverse when you want to check a claimed running cost. If you are told an appliance “costs X per hour to run,” you should be able to see the kW rating and the unit rate used to reach that figure; multiplying the kW rating by your own unit rate gives you the cost per hour directly, since cost per hour is simply kW multiplied by pence per kWh.

How does your meter actually record kWh?

Most business meters record cumulative kWh, either read periodically or measured automatically every half hour. A standard meter simply accumulates a running total, similar to a car’s odometer, and your usage for a bill is the difference between two readings. A half-hourly meter, which is compulsory for the largest sites and increasingly common for smaller ones, instead records a separate kWh figure for every 30-minute settlement period across the day, which is how network operators and suppliers can see when, as well as how much, you use.

This half-hourly detail is also what makes time-of-use pricing possible. Because DUoS network charges and some contract types price electricity differently depending on when you use it, a half-hourly meter lets your supplier apply the right rate to each 30-minute block of kWh, rather than a single average rate across the whole billing period. Our non-commodity costs guide explains how those time-banded network charges work.

What do MWh and GWh mean?

They are the same idea scaled up. A megawatt-hour (MWh) is 1,000 kWh, and Ofgem’s glossary confirms this directly. A gigawatt-hour (GWh) is 1,000 MWh, or one million kWh. You are unlikely to see these on a small business bill, but they appear constantly in wholesale market data and national statistics, because a country’s or a large site’s energy use is inconveniently large to express in individual kWh. Our wholesale electricity prices page, for example, quotes prices in £/MWh, which you divide by 10 to get pence per kWh.

Why does my gas bill also use kWh, if my meter reads something else?

Because a gas meter measures volume, not energy, so your supplier converts it. Most gas meters record how many cubic metres or cubic feet of gas have passed through, not kWh directly. Your supplier applies a correction factor and the calorific value of the gas that day to convert that volume into kWh, so that your gas usage can be billed, and compared with electricity, on the same energy unit. Our guide to converting a gas meter reading to kWh sets out the exact formula and a worked example.

How is kVA different from kWh?

kVA measures a different thing again: the maximum apparent power your connection is designed to handle, not the energy you actually use. Where kWh tracks what you consumed, kVA (or its close relation, kW of maximum demand) is used to size your connection and set your agreed supply capacity, which some businesses are charged for separately regardless of how much energy they actually use in a given month. Our guide to capacity charges and kVA explains this in full, including how exceeding your agreed capacity can trigger extra charges.

How does this show up in wholesale market data and price indexes?

Wholesale electricity is traded and reported in £/MWh, not pence per kWh, which is why our wholesale electricity prices page shows figures in that unit before translating them for comparison. To convert, divide £/MWh by 10 to get pence per kWh, since 1 MWh is 1,000 kWh and there are 100 pence in a pound. A wholesale price of £80/MWh is therefore 8.0p/kWh, before any network charges, policy costs or supplier margin are added on top; our guide to how wholesale energy prices work explains what happens between that wholesale figure and your final unit rate.

DESNZ’s non-domestic price statistics, which feed our Business Energy Price Index, are also published in pence per kWh for exactly this reason: it is the unit that lets a very small business and a very large one be compared on the same basis, and the unit your own bill is charged in, whatever your size.

Why does this distinction matter for your bill?

Two practical reasons. First, your unit rate is a price per kWh, so to estimate the cost of running something, you need both its power rating and how long it runs, not its power rating alone; a high-kW appliance used briefly can cost less than a low-kW one left running. Second, some parts of your bill, particularly capacity charges, are priced around the kW or kVA rate your site is capable of drawing, separately from the kWh you actually use, which is why a bill can include charges that do not move even in a month when your usage is unusually low. Our guide to reading a business energy bill shows where each of these appears.

There is a third, more strategic reason this matters. Two businesses with the same monthly kWh usage can end up with very different equipment and capacity needs, and therefore different capacity charges, if one uses its energy in a steady trickle across the day and the other draws the same total in short, high-kW bursts. The second business needs a connection sized for its peak kW demand, not its average, even though both businesses are billed the same for the underlying kWh. This is why reducing your peak demand, not just your total usage, is often the more effective way to control the non-energy parts of a bill. Our guides to capacity charges and kVA and how to reduce business energy costs cover this in more depth.

A common mix-up worth avoiding

Because kW and kWh share three of four characters, it is easy to see “5kW” on a spec sheet and assume it tells you the running cost. It does not, on its own. A 5kW appliance run for six minutes uses 0.5kWh; the same appliance run for six hours uses 30kWh, sixty times as much energy, from the same nameplate rating. Whenever you see a figure with a plain “kW” next to a running cost claim, check whether it has actually been converted to kWh using the time the equipment runs for, or whether it is only describing the equipment’s rate of draw.

If you want to see how your own kWh usage translates into a quote, you can compare business energy quotes with us.

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