When you receive your electric bill each month, you may notice the charge varies based on the kilowatt hours (kWh) used by your household. But what is a kilowatt hour and how are they measured? How can solar help you save on your monthly power expenses?

It is essential to understand that your monthly energy bill is split into two parts: a supply charge and a transmission and distribution charge. The transmission and distribution charges cover the cost of getting energy from the grid to your home or office. In contrast, the supply charge is the cost of the energy used by your household and the generation of said energy. The supply charge is calculated based on the kWh used. The average American household uses around 10,720 kWh per year. The utility company you contract with purchases energy on your behalf and passes that cost directly to you, the consumer.  

Let's break it down into parts to understand best what a kilowatt hour is. A "kilo" is a prefix commonly used in the metric system to describe 1,000 units. A watt (W) is a small unit of power named after Scottish inventor James Watt. A kilowatt (kW) equal to 1,000 W is approximately equivalent to 1.34 horsepower.

Logically, it may follow that a kWh is the number of kW used in an hour. However, this is untrue. While W and kW are units of electrical power,  kWh is a unit of electrical energy. If you have a 1,000W kitchen appliance, such as a small toaster oven, then turning on that toaster oven takes 1,000 W or one kW of power. If you run that toaster oven for an entire hour, it'll use one kWh of energy. Essentially, a kWh is the amount of power a device consumes over an hour.

Each device that consumes energy lists a specific wattage. This can be thought of as the period needed to consume a kWh of energy. For example, to use a kWh of energy powering a 100-watt electric mixer, you'd need to mix your ingredients for 10 hours. On the other hand, a 4000-watt generator would only need to run for 15 minutes to use a kWh of energy.

As mentioned earlier, the more kWh your household uses within a billing period, the more you must pay. Going solar helps reduce your monthly electric bill by lowering the price per kWh of energy used. You may receive a tax credit when you use energy generated by your own solar panels. With that, the amount you must pay per kWh may be less than half what you are charged for grid energy. While solar is a significant investment for most households, it can save residents money over time by reducing the cost of their electricity and keeping their energy payments steady. In contrast, the cost of grid energy is ever rising.

To combat this, you can take action within your home to reduce energy usage. Try some of these top tips for saving energy:  

1. Turn off and unplug devices when not in use.
2. Adjust your thermostat when you leave the house.
3. Use energy-efficient appliances.
4. Consider replacing your energy bill with solar payments.  

Have you thought about going solar? If so, get in touch with the Climate First Bank team! Visit our solar lending page today to learn more about our program.