How to Calculate Electricity Cost
Understanding your electricity bill can be simplified by breaking it down into a simple formula. The cost depends on three main factors: the power consumption of a device, how long you use it, and the price your utility company charges per unit of energy.
The Formula
The basic formula to calculate the cost is:
Cost = (Power in kW) × (Hours of Use) × (Cost per kWh)
- Convert Power to Kilowatts (kW): Most devices list their power consumption in Watts. Since electricity is billed in kilowatt-hours (kWh), you first need to convert Watts to kilowatts. The conversion is simple: 1 kW = 1000 Watts. So, divide the Wattage by 1000.
- Calculate Energy Consumption (kWh): Multiply the power in kW by the number of hours the device is used. This gives you the total energy consumed in kilowatt-hours.
- Calculate the Final Cost: Multiply the total energy consumption (kWh) by the price per kWh that your utility provider charges. This will give you the total cost for that period of use.
Example Calculation
Let's say you have a 100-Watt light bulb that you leave on for 8 hours a day, and your electricity rate is $0.12 per kWh.
- Power in kW: 100 Watts / 1000 = 0.1 kW
- Daily Energy Use: 0.1 kW × 8 hours = 0.8 kWh
- Daily Cost: 0.8 kWh × $0.12/kWh = $0.096
- Monthly Cost (30 days): $0.096 × 30 = $2.88