How to Calculate Electricity Cost
The formula is straightforward: convert watts to kilowatts, multiply by hours of use, then multiply by your electricity rate.
Cost = (Watts ÷ 1,000) × Hours × Price per kWh
Example
A 1,500W space heater running 6 hours per day at $0.16/kWh:
- Power: 1,500W ÷ 1,000 = 1.5 kW
- Daily: 1.5 × 6 = 9 kWh × $0.16 = $1.44/day
- Monthly: 9 × 30 = 270 kWh × $0.16 = $43.20/month
- Yearly: 9 × 365 = 3,285 kWh × $0.16 = $525.60/year
Common Appliance Costs
| Appliance | Watts | Typical Use | Monthly Cost* |
|---|---|---|---|
| Central AC | 3,500 | 8 hrs/day | $134.40 |
| Water Heater | 4,500 | 3 hrs/day | $64.80 |
| Space Heater | 1,500 | 8 hrs/day | $57.60 |
| Dryer | 3,000 | 1 hr/day | $14.40 |
| Refrigerator | 150 | 24 hrs/day | $17.28 |
| TV (LED 55") | 80 | 5 hrs/day | $1.92 |
| Desktop PC | 200 | 8 hrs/day | $7.68 |
| LED Bulb | 10 | 8 hrs/day | $0.38 |
| WiFi Router | 12 | 24 hrs/day | $1.38 |
| EV Charger (L2) | 7,200 | 4 hrs/day | $138.24 |
*Based on $0.16/kWh national average
Tips to Reduce Electricity Costs
- Switch to LED: LED bulbs use 75% less energy than incandescent — a 10W LED replaces a 60W bulb
- Use smart power strips: Eliminate "phantom load" from devices on standby (TVs, chargers, game consoles)
- Adjust thermostat: Each degree of AC cooling adds ~3% to your cooling bill
- Run appliances off-peak: Many utilities offer lower rates during off-peak hours (nights, weekends)
- Upgrade old appliances: ENERGY STAR appliances use 10-50% less energy than standard models
- Air seal your home: Sealing drafts reduces heating/cooling costs by 10-20%
Average Electricity Prices by Region
| Region | Avg. $/kWh |
|---|---|
| US National Average | $0.16 |
| New England | $0.25-0.35 |
| Pacific (CA, OR, WA) | $0.18-0.30 |
| South Atlantic | $0.12-0.16 |
| Mountain | $0.11-0.15 |
| Central | $0.10-0.14 |
| Hawaii | $0.35-0.45 |