How to Calculate Electric Bill

electricity charges

Do you get a sinking feeling every time the monthly electricity bill is about to arrive? If there only was a way to find out what the charge will be so that you could manage better. Well, there is! Today you will learn an easy way of calculating electricity bills, in just a couple of hours.

Calculate Energy Consumption

Your electricity usage per month will have a direct correlation with your electricity billing. If you don’t like surprises, you can create an estimate for an electric bill, by simply adding up the energy usage of all appliances you use each month.

How can you calculate electricity consumption? If you know the wattage of your device, the formula is pretty straight-forward:

Device Wattage (watts) x Hours Used Per Day = Watt-hours (Wh) per Day / 1000 = Kilowatt-hours (kWh) per Day

For example, If you watch your 125-watt television approximately 4 hours per day, you end up consuming 125 watts x 3 hours x 28 days = 10,500 Wh/Month / 1000 = 10,5 kWh/ Month.

Of course, using the kWh calculation for every single appliance in your house is very tedious so we will work with simple averages instead.

Use Household Averages

An easier and much more straight-forward wait to calculate electricity costs is to look at the monthly energy consumption averages for an average household in the US.

According to Connect4Climate, a global partnership program launched by the World Bank Group, the breakdown in the energy use of a typical home looks something like this:

electricity billing

However, this chart is only indicative and does not reflect your actual usage. If you want to find the average monthly usage in your home, you can do one of the following.

Use a Monitoring Device

This option will require some initial investment, even though it will probably save you more money down the road. A monitoring device is essentially an electricity meter, that connects to your electrical panel and tells you how much energy your home appliances are using. Some models even generate personalized recommendations to make your home more energy-efficient.

Two leading home energy monitors are Home Energy by Sense and Smapee by Smapee – each device costing approximately $300 on Amazon. There are also less expensive monitors out there, but they don’t allow monitoring how much electricity individual appliances use or their sensors aren’t as good.

Calculate Your Bill Manually

This method is entirely free, even though it will definitely consume some of your time. That being said, it is empowering to understand your household’s energy consumption and you will likely gain a new appreciation for being eco-friendly and using less electricity.

All you need is a sheet of paper, where you list all the appliances in your house that consume electricity. Next, add two columns – Appliance Wattage and Monthly Usage in kilowatt-hours. There, the first step is done.

Determine the Wattage of an Electrical Appliance

In order to determine the wattage for each appliance, you might have to do some detective work. The wattage of the product is often labeled on the back of the product itself. However, sometimes the label can also be at the bottom. It should look like this:

watts to units

If the electricity label has been scratched over the years, or you can’t find it on the device, simply go on the Internet and look for the same or similar product to determine the number of watts it’s using.

Estimate Monthly Use and Calculate Kilowatt-Hours (kWh)

Once we determined the wattage of your appliances, we can proceed to calculate the kWh energy usage, or in layman’s terms – how much electricity do these appliances use on daily basis.

Go back to your sheet of paper and for each item, write down roughly how many hours do you use the appliance on monthly basis. For example, if you use your oven for 30 minutes to cook lunch and then another 30 minutes to cook dinner, that’s 1 hour/day or 30 hours per month.

Then, multiply the appliance wattage by hours used per month. If the wattage of your oven is 2500 watts, your calculation will be 2500 x 30 = 75,000 watts / 1000 = 75 kWh.

Repeat for each appliance on your list.

Calculate the Cost of Electricity

At last, we are ready to estimate the electricity bill, based on our calculations. You will have to multiple your monthly power usage with the average electric rate per kWh to determine how high your next energy bill will be. It’s quite simple.

You live in Texas and you haven’t yet switched electric suppliers, which means that you are paying the standard electricity tariff of 11.85 cents per kWh.

The average monthly energy consumption of an American household is between 500-2000 kWh. Find the total usage for all appliances you have calculated, add it up, and multiply it by your rate per kWh.

So, let’s say your calculated electricity usage per month came up to 1500 kWh – multiply it by 11.85 cents to get the estimated electricity bills of $177.5 (energy cost per month).

Did you know…

Your electricity rate per kilowatt-hour will also have a significant impact on your final power bill. You might not be aware that average electricity rates differ in every state, from the cheapest Louisiana (7.71 cents / kWh) to the most expensive Hawaii at whooping 29.18 cents / kWh.

If you are fortunate to live in one of the 18 energy-deregulated U.S. states, you can easily switch to an alternative power plan with a cheaper rate / kWh.

What Appliances Use the Most Energy?

As we discussed earlier, based on the Connect4Climate research, these are ten appliances that use the most electricity every day in your household:

AppliancePortion of Total Electricity UsedAverage Electricity Cost Per Household (Per Year)
Cooling and heating47% $1,056.00
Water heater14% $317.00
Washer and dryer13% $143.00
Lighting12% $28.00
Refridgerator4% $95.00
Electric oven4% $90.00
TV, DVD, cable box3% $57.00
Dishwasher2% $49.00
Computers / Laptops1% $28.00

Modern comfort comes at a price and air conditioners, refrigerators, chargers, and water heaters are the third-largest use of energy in the United States. What’s worse, according to the same report, 35% of residential energy in the US is wasted, rather than used!

You might be surprised to learn that a number of modern devices in your home, such as the DVR, computer, laptop are referred to as ‘vampire appliances’ because they continue using energy and cost you money even in the ‘Stand By’ mode.

For example, by not turning off your laptop properly (closing it, instead of switching it off with a button), you’re burning through an extra 34 dollars on your annual electricity invoice.

Consider getting a smart power strip, a device that shuts off electronics that are no longer in use, to avoid steep standby power costs.

Tools to Calculate Your Electricity Bill

If you don’t feel like adding up all of those watts manually, the Department of Energy offers a free online calculator that allows you to estimate your annual energy use very quickly. You can bookmark it on your computer and use it every once in a while for estimating bills.

The other, more sophisticated option is to pay for a usage monitor, that will be doing this for you manually every day. The leading home energy monitor is the Home Energy by the company Sense, for which you will pay approximately $300.

Congratulations, you are done! You now know how to calculate the electricity bill and estimate the amount of electricity you use with only the wattage of your appliance and the number of usage hours per day.

Hopefully, this information will help you avoid any unwanted surprises next time you receive your bill in the mail. It might also motivate you to become more energy-efficient and avoid wasting as much electricity as possible. Finally, if you are currently paying a high rate for your electricity, you might look at switching to an alternative plan with a cheaper rate, pushing your energy bill cost down lower.

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