A Simple Guide on Energy Usage Calculations

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. Knowing your electric bill is the best way to take back control over your electricity costs and reduce how much energy you consume. Let’s forget all those times you scratched your head at your electricity cost.

Electricity Calculation Formula

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. After all, your electric bill is all your power consumption summed up in a single field.

To do this, you need to know the power consumption of each device you have. For this, you need to find the label on the backside. Markings saying something like ‘500W’ or “750W’ tell you how much electricity your appliance uses in an hour. This is the ‘appliance’s wattage’. Now, how can you calculate electricity consumption? If you know the wattage of your device, the formula here 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.

This may not seem like much, but kWh usage really adds up and makes your monthly bills much higher.

Of course, using the kWh calculation for every single appliance in your house is very tedious so we will work with simple averages instead. Alternatively, you can purchase a simple device called an electricity usage monitor. This device plugs into your wall socket, and then you plug in the electronic device you want to monitor into it. Once you have a day’s worth of reading, it is easy to calculate the total cost of running this electronic device per month and year.

Use Household Averages

An easier and much more straightforward wait to calculate electricity costs is to look at the monthly energy consumption averages for an average household in the US. Although different households have a different electricity bills every month, the average electricity usage per month is more or less the same for each state. This is especially true if you do the calculation of what your monthly use is per square foot.

o, houses in the south of the US, generally have the highest electricity usage for cooling, while the houses in the north have the highest monthly use in the winter – for heating. 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. The actual kilowatt-hours you use that are on your energy bill will vary depending on your home size, your appliance’s wattage, and how much clean energy through your solar panels you get. 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 of how much electricity individual appliances use or their sensors aren’t as good. Always invest more money as knowing the monthly use of a typical appliance can save much electricity in the long run.

Calculate Power 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. Depending on how much electricity you use every month and how much money you pay for each kilowatt-hour, you can save a significant amount of money.

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. You should also add a column with hours an appliance is used every month, as this determines your total monthly use for that specific appliance.

How to Measure Electricity Usage by an 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. Usually, a simple search query is enough to give you all the details, for as long as you can tell the manufacturer and the model of the specific appliance.

Estimate Monthly Use and Calculate Kilowatt-Hours (kWh)

Once we determine 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 a daily basis.

Go back to your sheet of paper and for each item, write down roughly how many hours you use the appliance on a 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.

 You would be surprised at the exact monthly use of each device. Repeat for each appliance on your list. Let’s look at some examples:

ApplianceWattage per HourHours of Use per DaykWh rate [$]Electricity Cost per DayElectricity Cost per MonthElectricity Cost per Year
Air Conditioner3,000 watt 12$0.1042$3.75$112.54$1,369.19
Space Heater2,000 watt 10$0.1042$2.08$62.52$760.66
Electric Water Heater2,000 watt 5$0.1042$1.04$31.26$380.33
Oven2,700 watt 1.5$0.1042$0.42$12.66$154.03
Hot Plate 2,500 watt 1$0.1042$0.26$7.82$95.08
Freezer300 watt 3$0.1042$0.09$2.81$34.23
Fridge150 watt 3.5$0.1042$0.05$1.64$19.97
Fan33 watt 8$0.1042$0.03$0.83$10.04
LED Light7 watt 6$0.1042$0.004$0.13$1.60
Laptop45 watt 8$0.1042$0.04$1.13$13.69

*US average of $0.1042

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 or $0.1185 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 bill of $177.5 (energy cost per month).

This will, of course, differ from one household to the next. One unit of the apartment does not use exactly the same amount of energy as another one. 

Furthermore, the cost of electricity and how high your bill will depend on: 

  • The average number of people in your household, 
  • The cost of electricity in your area, 
  • How much power your typical appliance uses, 
  • How many hours a day the appliance runs, 
  • Whether you use gas or electricity for heating and cooling, 
  • If you are absent one month (for vacation) or not, 

You should understand that when you measure your kWh usage and calculate the entire monthly usage, there will be mistakes you make. Measuring and calculating are here to give you an idea of the price you pay for each appliance, not to calculate the exact usage. This is what the meter system is here for. 

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 a whopping 37.18 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. Furthermore, adding a solar collector for water heating to your rooftop can help you save around 15-20% of your energy bill, and installing a solar panel array can reduce your energy use by 100% – plus you get the benefit of clean energy. 

Did You Know…

  • An average US household uses 11,000 kWh of electricity per year, 
  • The average US electricity bill is $115 per month – a bit of perspective when you try to calculate your electricity bill, 
  • An apartment unit uses up to three times less power than a home, 
  • An average US dryer uses around 156 kWh per year, 
  • A single bath uses an equal amount of water and heat energy as three showers, 
  • Home insulation is the first thing to invest in – you can save around 50% of your power bill this way, 
  • Most power companies are switching to clean energy in the US. 

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:

Appliance% of Total ElectricityAverage Residential Electricity Cost (Yearly)
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, and laptop are referred to as ‘vampire appliances’ because they continue using energy and cost you money even in the ‘Stand By’ mode. Although they do not consume much, just add them all up and you will be surprised by how much power goes to these devices. In the UK alone, vampire use is enough to power 60,000 households every year.

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. The same goes for your TV, microwave, surveillance system, and chargers, as these devices all spend electricity when off. Install solutions that can save you money. 

Consider getting a smart power strip, a device that shuts off electronics that are no longer in use, to avoid steep standby power costs. When you calculate your electricity bill, most of the difference between your calculation and the actual electricity usage goes for the ‘vampire’ portion of electricity usage. 

Energy Audit to Lower your Electricity Bill

Another great thing that can add value to your home or apartment unit is a home energy audit. There are two kinds of audits: professional and DIY. Whatever option you choose, you should be able to spare more time, as an energy audit can last for up to a day. Following simple steps, you will be calculating the best way to invest and save heat, track expenses, and budget for the highest reduction in energy consumed. 

A home energy audit is straightforward, will help you convert your home into an energy-efficient home, and help keep the heat in even in the middle of January. There are a number of steps and tips to pay attention to, depending on how old your home and your appliances are. These include insulation, cracks, wall cracks, draft, windows and doors, humidity check, air or water leaks check, and others.

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  (Electric Bill Estimator) 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 instead of calculating them using our formula.

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 Home Energy by the company Sense, for which you will pay approximately $300. These devices can give you a very good idea of the actual electricity usage, as they track kilowatt hours spent throughout the day, even on standby.

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. However, beware that your electricity bill will also include other expenses that are not related to your actual power use. The utility company and power provider costs are included as well, as well as taxes and any other fixed expenses

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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