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What Is A kWh: A Guide for Business Owners

CHRIS RICHARDS | 12 OCTOBER 2021

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Whenever you switch on a light, or plugin and power up an electrical appliance, you contribute to your businesses energy consumption. Although energy is intangible, it is still a product that we consume, and therefore it is a commodity that we pay gas and electricity companies for access to.

In order to keep track of energy consumption, companies use a standard energy measurement known as a kilowatt-hour (kWh). This is to help them calculate how much energy we use, and how much to charge us for. But what is a kWh?

In this article, we'll help you to understand what a kWh is, the difference between kW and kWh, and why keeping track of the number of kilowatt-hours you use –in your household or business – is important if you want to reduce your energy usage and save money on your monthly energy bill.

Kilowatts (kWs) and Kilowatt Hours (kWhs) Explained

What is a kW?

A kilowatt, often referred to as a kW, is simply a unit of power based on watts or wattage. There are many different ways to measure different types of power, however, watts and kilowatts are used as a universal standard measurement for electricity power.

Using watts and kilowatts is an easy way to communicate and record how powerful certain household appliances are, such as microwaves, hairdryers and ovens. Importantly, a kilowatt is simply 1000 watts. So, a 1000 watt microwave could also be called a 1-kilowatt microwave.

A useful way to differentiate between kW and kWh (kilowatt and kilowatt-hour) is that a kilowatt is a measure of power, rather than a measure of energy consumption.

What is a kilowatt-hour?

A kWh is a way of communicating a measurement of energy. This measurement helps to work out how much power - in kilowatts - is required to power an appliance for any given amount of time.

As an example, if a 1000 watt - or 1 kilowatt - microwave was left running for one hour, it would have used 1 kWh. Alternatively, if you switched on a 100-watt lightbulb (0.1 kilowatts), it would take 10 hours to burn 1kWh of electricity.

Depending on the appliance you use, it's possible to use a kilowatt-hour (kWh) slowly, over longer periods of time, or very quickly, in short, intense bursts. This will usually depend on the wattage and efficiency of the appliances that you are using.

Understanding what a kWh is will help you to decipher your monthly energy bill, and work out the exact amount of energy you're using each month – and what you're being charged for it.

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How Many kWh Does My Business Use Per Month?

To work out how many kWh your business uses each month, it's important that you take a look at your most recent energy bill. This will detail exactly how many kWh your business has used, and how much you have been charged for them.

If you want a rough idea of how many kWhs your business is using each month, you could start by considering the types of electrical appliances you commonly use in your business, and the wattage and efficiency of these appliances. If you're not sure, now is a good time to find out!

Appliances with a higher wattage will use more kWh in a shorter period of time. Examples of appliances that tend to have high wattage include printers, power drills, ovens, dishwashers and washing machines.

You might think that lower wattage appliances are a safe bet if you're looking to use fewer kilowatt-hours, but this isn't always the case! If these items are used more frequently, left on, or for longer periods of time, they could end up burning more kWh overall than higher-power appliances.

That being said, there are many variables that could impact the number of kilowatts your business uses each month, including the size of your premises and the number of people you employ. Beginning to understand how your electricity gets used is a great first step to reducing energy costs and your monthly electricity bill.

How far one kilowatt-hour goes

It can be hard to say exactly how far one kilowatt-hour will go, as different appliances will have varying energy efficiency. Energy efficiency refers to how well an appliance converts its electricity usage into useful energy output: for example, an efficient light bulb won't waste much energy as heat.

The Energy Saving Trust has some useful examples of how far one kilowatt-hour will go when using a selection of common household appliances. This includes:

  • Cooking in a 2,000-watt oven for about half an hour
  • Running an average fridge-freezer for three hours
  • Using a desktop computer for four hours
  • Connecting your business internet for around five days
  • Watching a large plasma-screen TV (usually around 280-450 watts) for three hours
  • One hour of ironing with a 1000 watt iron

How Much Does A kWh Cost?

Now that you understand what a kilowatt-hour is, and how to work out how many you are using, you might be wondering how much you should be paying per kWh of energy consumption. The average unit price for business electricity in the UK as of 2021 is 14.40 pence per kWh, but the amount your business will spend each month on energy costs will depend on the tariff you have agreed with your current energy company.

When signing up with a business electricity supplier, they will let you know how much they charge per kWh of electricity. Every energy plan comes with its own pricing, and different energy suppliers will have different energy prices: this is one of the reasons why it's so important to compare and save with Business Energy UK.

There are a number of different electricity tariffs offered by UK companies. For example, you could choose a fixed-rate tariff, which means that you will know exactly how much you will pay per kWh of energy throughout the duration of your tariff. Your bill will only change depending on how much electricity your business uses each month.

Alternatively, you could choose to sign up for a standard variable business energy tariff. This means that the price you pay per kWh could fluctuate depending on market wholesale energy prices. Having a standard variable tariff can mean you save money if wholesale electricity prices fall, but it can be hard to predict your business' monthly energy bill.

How Can I Reduce My Business Energy Bills?

Encourage employees to make changes

If you're thinking about ways to reduce how much energy your business uses each month, it's important that you communicate with your employees, and encourage them to make energy-saving changes.

Your employees will be responsible for much of your businesses energy expenditure, so it's important that they are making conscious energy-saving decisions if you want to reduce your monthly energy bill. Simple actions such as turning off lights when entering a room and switching appliances off at the plug when leaving the office could have a large impact on your energy bills.

To get people involved, why not host a company-wide brainstorming session about the different ways that your business could work towards using less energy. You could also consider leaving subtle nudges and prompts, such as signage by light switches and next to taps, in order to remind people to switch off lights and faucets once they're done using them.

Monitor how much electricity you use

In order to use less energy, it's important to monitor the amount of electricity your business is currently using each month. To help understand how much energy your company is currently using, why not install a smart meter?

A smart meter with a built-in display or energy monitor is a fantastic way to help you save on your energy bills, as they help you to understand just how much energy you are using. Instead of having to access a complicated meter reading, a smart meter lets you see in real-time, day-to-day, how much power you're using, and your electricity cost.

When you can see and understand how much electricity you're using, and the kWh cost, it becomes much easier to take practical steps to reduce your energy consumption and your carbon footprint.

Swap to energy-efficient equipment and bulbs

When thinking about reducing your business energy expenditure, another easy but important change can be to swap to energy-efficient appliances and energy-saving light bulbs.

Although two appliances may appear the same, they could have very different energy efficiency ratings, which means that they will in fact consume different amounts of energy, and have a different kWh cost.

According to the Energy Saving Trust, appliances will have an efficiency rating from A to G, with A being the most efficient and G being the least. If you need to purchase new equipment for your office, make sure you're choosing efficient appliances, as this could help to vastly reduce your electricity costs.

Additionally, another quick and easy change for any business is to ensure that you're using energy-saving light bulbs across your premises. New, energy-saving bulbs, known commonly known as LEDs, convert over 90% of the energy they use into light, making them incredibly efficient. They also have a much longer life span than traditional bulbs, making them cost-effective too.

Consider conducting an energy audit

If you're a large company looking for ways of significantly reducing both your electricity consumption and carbon footprint, you might want to consider conducting a business energy audit.

An energy audit is an externally conducted in-depth report that analyses your business and highlights areas where you could save energy. Carrying out a commercial energy audit will help your business to reduce both electricity bills and overall consumption.

Some of the areas that a business energy audit will cover includes:

  • Analysing your business gas and electricity tariff
  • Looking at your water tariff
  • An analysis of your business energy expenditure, including recommendations for changes
  • Management of any external energy contracts
  • Professional and personalised energy management advice

Cut Energy Costs With Business Energy UK

One of the best ways to cut energy costs is to make sure you're getting the best deal and electricity cost from your current energy supplier. With our free energy comparison tool, you can compare energy tariffs and kWh costs from a wide range of UK suppliers in less than 60 seconds!

Business Energy UK allows you to filter your results based on the tariff you're after, including fixed-rate, standard variable and green energy options. Search for single policies, such as gas or electricity, and compare the cost with dual-tariff options, to see where you could save.

Switching gas or electricity provider is easy when you compare energy costs with Business Energy UK!

Frequently Asked Questions

A kilo-watt hour is a unit used for measuring energy usage. A kilowatt is 1000 watts, so therefore 1 kWh is the amount of energy consumed by a 1,000 watt or 1 KW appliance over the duration of an hour.

There are a number of variable factors that will affect how many kWhs your business uses on a day-to-day basis. This includes, but is not limited to:

  • The size of your businesses premises.
  • The number of employees you have.
  • The sort of work your business does. For example, if your companies day-to-day work involves using high-wattage appliances such as power drills, you might be likely to consume more kWhs.
  • The time of year. Most businesses will burn more electricity in winter compared to summer.

Although it might seem daunting, it's easy for your business to start saving energy today! There are many small changes that you could make as a company, which could have a large impact on your businesses overall energy consumption. For example:

  • Encourage employees to turn off lights and faucets
  • Use timer plugs to switch off all office appliances overnight
  • Switch to energy-efficient equipment and light bulbs
  • Undertake an energy audit