How to Calculate the Electricity Cost of Appliances

The basic formula: watts to kilowatt-hours to money

Power is measured in watts (W) and tells you how fast an appliance uses electricity at a given moment. Divide by 1,000 to get kilowatts (kW). Multiply kilowatts by the number of hours the appliance runs and you get kilowatt-hours (kWh), which is the amount of energy used. Your utility bill charges you per kWh, so the cost is simply kWh multiplied by your rate.

In the examples below we assume a rate of $0.17 per kWh. That is only a placeholder: electricity prices vary widely between countries, regions, suppliers and tariffs, and they change over time. Substitute the rate from your own bill to get a meaningful answer.

Example: a 150 W television watched for 5 hours a day uses 0.15 x 5 = 0.75 kWh per day, or 273.75 kWh per year. At $0.17/kWh that is about $46.54 a year. A 1,200 W hair dryer used for 10 minutes a day uses 1.2 x 10/60 = 0.2 kWh per day, or 73 kWh a year, about $12.41. A high wattage does not automatically mean a high bill; the hours of use matter just as much.

• kW = W / 1,000
• kWh = kW x hours of use
• Cost = kWh x price per kWh
• Yearly cost = daily cost x 365

Finding your real price per kWh

Many bills are more complicated than a single price per kWh. A typical bill may include a fixed monthly charge that you pay regardless of usage, an energy charge per kWh that can rise in tiers as usage increases or vary by time of day, and various per-kWh surcharges, levies or adjustments. Taxes may be added on top.

A simple way to find your effective rate is to divide the total bill by the kWh used. For example, if you used 600 kWh in a month with a fixed charge of $12, an energy charge of $0.15/kWh and a $0.01/kWh surcharge, the bill is 12 + 90 + 6 = $108 and the effective rate is $108 / 600 = $0.18 per kWh. Because the fixed charge is spread across your usage, the effective rate is usually a little higher than the headline energy price.

For estimating the cost of one extra appliance, the marginal rate (the energy charge plus any per-kWh surcharges) is often the better number, since the fixed charge does not change when you switch something on. For comparing your whole bill month to month, the effective rate is more useful.

Standby power adds up

Many devices draw a small amount of power even when they appear to be off: televisions and set-top boxes, game consoles, chargers, microwave clocks, smart speakers and some heated toilet seats. Each one may use only a few watts, but because standby runs 24 hours a day, every day, it accumulates.

A device with 2 W of standby draw uses 2 x 24 x 365 / 1,000 = 17.52 kWh per year, about $2.98 at $0.17/kWh. If all the devices in a home add up to 10 W of standby, that becomes 87.6 kWh, about $14.89 a year. A switched power strip or turning devices fully off can reduce this, but check first whether a device needs power for recordings, updates, clocks or network features.

Air conditioners: power draw is not constant

Air conditioners and heat pumps follow the same formula, but with an important difference: their power draw changes constantly. Modern inverter units run hard when they start up or when the outdoor temperature is far from the set point, then throttle down once the room is comfortable. The rated power on the label is a reference value under standard test conditions, and actual draw may be well above or below it.

As a rough example, a unit drawing an average of 900 W for 8 hours a day over 30 days uses 0.9 x 8 x 30 = 216 kWh, about $36.72 at $0.17/kWh. A larger unit averaging 1,500 W under the same conditions would use 360 kWh, about $61.20. Treat such figures as estimates; insulation, climate, thermostat settings and the size of the room all change the result. If your unit's documentation lists a seasonal or annual energy consumption figure, multiplying that by your rate is another way to estimate the yearly cost.

The air conditioner cooling and heating calculators on this site take the power draw, hours per day, number of days and your rate, and return the electricity cost and estimated CO2 emissions for the period. The cooling version also offers typical power values by room size if you do not know your unit's figures.

Worked example: switching to LED bulbs

Lighting is one of the easiest places to see savings, because bulbs run for many hours. Suppose you replace four 60 W incandescent bulbs with 9 W LED bulbs that give similar light, and each is on for 5 hours a day.

The incandescent bulbs use 60 x 5 x 365 x 4 / 1,000 = 438 kWh a year, about $74.46 at $0.17/kWh. The LEDs use 65.7 kWh, about $11.17. The saving is about 372 kWh, or roughly $63.29 a year. Divide the cost of the new bulbs by that yearly saving to estimate the payback period. LEDs also generally last much longer than incandescent bulbs, which reduces replacement purchases.

The same approach works for any upgrade decision, such as a new refrigerator or a more efficient heater: calculate the yearly cost of the old and new models, take the difference, and compare it with the purchase price. Running cost is only one factor, so also consider purchase price, lifespan and how well the product meets your needs.

• 4 x 60 W incandescent, 5 h/day: 438 kWh/year, about $74.46
• 4 x 9 W LED, 5 h/day: 65.7 kWh/year, about $11.17
• Estimated saving: about $63.29 per year at $0.17/kWh

Calculators that help

The electricity bill calculator estimates a monthly total from usage, an energy price, a fixed charge and an optional per-kWh levy (enter 0 if your bill has none), and shows your effective price per kWh. The LED vs incandescent calculator compares two bulb wattages over a year using your hours, number of bulbs and rate, and reports both the cost saving and the CO2 reduction. The default rates in these tools are examples only, so replace them with the figures from your own bill for results that reflect your situation.