How to Calculate Electricity Cost
The formula is:
Cost = (Watts × Hours ÷ 1,000) × Price per kWh
A 100-watt light bulb running 8 hours a day at $0.16/kWh costs: (100 × 8 ÷ 1,000) × $0.16 = $0.128/day or about $3.84/month.
Common Appliance Costs
Assuming $0.16/kWh and typical daily usage:
| Appliance | Watts | Hours/Day | Monthly Cost |
|---|---|---|---|
| LED Bulb | 10 | 8 | $0.38 |
| Laptop | 65 | 8 | $2.50 |
| TV (55") | 150 | 5 | $3.60 |
| Refrigerator | 350 | 8* | $13.44 |
| Space Heater | 1,500 | 6 | $43.20 |
| Central AC | 3,500 | 8 | $134.40 |
| Water Heater | 4,500 | 3 | $64.80 |
* Refrigerators cycle on/off; actual compressor run time is about 8 hours per day.
Tips to Cut Your Electric Bill
Heating and cooling account for nearly half of a typical home's energy bill. These changes make the biggest difference:
- Replace incandescent bulbs with LEDs — saves roughly $100/year for a typical home.
- Set your thermostat 2°F lower in winter and 2°F higher in summer. Each degree saves about 3% on heating/cooling costs.
- Unplug chargers and devices on standby. "Phantom load" can add $100+/year.
- Wash clothes in cold water. About 90% of the washing machine's energy goes to heating water.
- Use our savings goal calculator to track how much you save each month.
Understanding Your Electric Bill
Your utility bill shows total kWh consumed during the billing cycle. Divide your bill amount by kWh to find your actual rate. This rate often includes delivery charges, taxes, and fees on top of the generation cost.
If you want to project annual costs and compare against other expenses, the salary converter helps you see how energy costs fit into your take-home pay.