The potential energy of an object is its ability to do work because of its position or shape. For example, when we wind a clock, the work done by us stored energy in the spring and the spring runs the clock by unwinding itself. The spring possesses potential energy because of its deformed condition (shape).

The most common form of potential energy is the gravitational potential energy (GPE). In raising a body of mass m to a vertical height h from the surface of the earth, work is done against the force of attraction of the earth. The amount of work done is stored as potential energy in the body. Thus, due to its position at a higher level, the body possesses more capacity to do work than it had when it was at ground level. The gravitational potential energy (or simply potential energy, PE) is given by the equation:

PE = mgh

where h is the height above a given reference point. Figure 7 illustrates that lifting a ball onto a shelf requires a certain amount of work. The ball can remain on the shelf for any length of time, but if the ball falls back to the floor (Figure 7 (b)), gravity does the same work on the ball that you did to lift it in the first place. Thus, the work done in lifting the ball is stored as potential energy, ready for conversion to kinetic energy when the ball falls.