# kWp vs kWh: solar terms explained for business

kWp (kilowatt-peak) is a solar system's rated capacity, the maximum power it can produce under standard test conditions. kWh (kilowatt-hour) is a unit of energy: what the system actually generates, or what your building uses, over time. Capacity (kWp) sizes the system; energy (kWh) is what shows on your bill.

## What kWp means: capacity

The p in kWp stands for peak. It describes how much power an array can deliver at a single moment under standard test conditions: bright, cool, direct sunlight. A 100 kWp system is one built from panels that add up to 100 kilowatts of rated output. Think of it as the size of the system, the same way engine capacity describes a vehicle rather than the distance it travels.

Because kWp is measured under laboratory conditions, a system rarely hits its full peak in normal British weather. That is expected and not a fault. Capacity still matters because it sets the ceiling for how much a system can produce and largely determines the installed cost.

## What kWh means: energy

A kilowatt-hour is one kilowatt of power used or generated for one hour. It is the unit your electricity supplier bills you in, and the unit a solar system's output is measured in over a day, month or year. When someone asks how much a solar array produces, they usually mean kWh.

Your generation in kWh is what offsets the units you would otherwise buy from the grid. Under a PPA you pay a fixed rate per kWh generated and used on site, set at least 30% below your grid rate, so understanding kWh is central to understanding the saving.

## How the two connect for sizing

Capacity and output are linked by how much usable sunlight your site receives. As a rough rule of thumb, each kWp installed in the UK generates somewhere around 850 to 950 kWh over a year, though your actual figure depends on orientation, shading, pitch and location. Multiply installed kWp by that yield and you get an annual kWh estimate.

For sizing, the goal is to match generation to what your business actually uses during daylight hours. Oversize the kWp and you export cheap surplus; undersize it and you keep buying expensive grid units. A good proposal models your half-hourly consumption against expected kWh output to find the balance.

## Frequently asked questions

**Is a bigger kWp system always better?**

Not necessarily. The best size matches your daytime electricity use, so most generation is consumed on site where it saves the most. A system far larger than your demand exports surplus at low rates, which weakens the return.

**How do I estimate my annual kWh from a system size?**

Multiply the kWp by an assumed annual yield per kWp for your location, then adjust for shading and orientation. A site survey refines this using your roof's specifics and your half-hourly consumption data.

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Source: [kWp vs kWh: solar terms explained for business](https://ppafunding.com/guides/kwp-vs-kwh-solar-terms-for-business) · Author: PPA Funding team · Updated: 2026-07-30

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