Onions are about as universal an ingredient as there is. One way or another, they're used in almost every cuisine around the world. They only have a couple of shortcomings. One is that although they have a pretty good shelf life, they are perishable. Another is that cutting them can bring tears to your eyes and leave you red and blotchy, which isn't ideal when you're expecting company. Dried onions address both of these issues.
Of the various dried onion products you'll find in the spice section of your supermarket, the most onion-like are the dried pieces, rather than powdered. These come in a couple different forms, some larger than others. Most are rather small flakes, meant as a minced onion substitute. Some brands also make a larger, chunkier version intended to replace chopped onions.
As a substitution, roughly 1 tablespoon of onion flakes will replace a small minced onion or half a medium onion. If you have the bulkier chopped onions, you would use 2 tablespoons of dried onions to get the same amount of flavor.
Using Dried Onion in Recipes
Because the onion is dried, in most cases you'll want to add it to a liquid ingredient. This does two things: The liquid rehydrates and softens the onions, and it also infuses the onion flavor throughout the dish.
The exact liquid ingredient to which you're adding the onion is up to you, and the recipe. If you're using the dried onions in a soup, stew or chili, you can simply add them to the pot. In an omelet or egg dish, rather than sauteing the onions first and adding them to the egg afterward, you can simply whisk them into your eggs. In a salad, you can either add them to the dressing ingredients or simply scatter a handful over your bowl as a flavorful, crunchy garnish.
Using Onion Powder
The most concentrated form of dried onion is onion powder, which is essentially the same as dried onions except they're milled to a consistency resembling fine salt or stone-milled flour. Onion powder can be used in the same dishes as dried onion flakes, though with a couple of changes.
Finely ground dry onion is more potent than flakes so if you're using onion powder, substitute up to 1 teaspoon of onion powder instead of a tablespoon. You may not even need the whole teaspoon, so start with 1/2 to 3/4 and add more if you think you need it.
Dried Onions Aren't Necessarily a Compromise
You don't have to be sheepish about using dry onions. They're faster than fresh, they're more convenient and in some ways, they're more versatile. You can add onion flakes or powder to your favorite barbecue spice rubs, for example, or mix them with other spices to make up a home "instant chili kit" that's better than the ones you can buy in stores. The drying process also gives onions a hint of toasty flavor that's not there in fresh ones.
Even better, you can use them in ways that just wouldn't work with fresh onions. You can add them to the breading for fish, chicken or chops, for example, or even use them as the breading. No matter how good your knife skills are, you can't do that with fresh.
Freshness Still Counts
All these substitutions are based on the assumption that your dried onions are fresh and flavorful, and that's not always the case. If you don't remember how long yours have been in the cupboard, throw them out and treat yourself to some new ones. Labeling and dating your spices when you buy them is a good habit to develop. After a year, they're usually past their prime, and you can replace them as opportunity and your grocery budget permit.
Freeze-dried onions have the freshest flavor, if you can find them. The finer the onions are cut, the faster they'll lose flavor so chopped last better than flakes and flakes last better than powder. If you're uncertain how much flavor you're actually getting, taste a few flakes or dab a fingertip into the powder. The less onion flavor you detect, the more of the dry onion you'll need to use to get the right flavor.