How it’s calculated
Energy is power multiplied by time. Dividing watts by 1,000 gives kilowatts, and kilowatts × hours gives the kilowatt-hours (kWh) your utility bills.
Example (default example rate): a 1,500 W space heater used 4 h a day, every day. 1,500 × 4 × 365 ÷ 1000 = 2,190 kWh per year × $0.17 = $372.30 per year ($31.03 per month, $1.02 per day, $0.255 per hour).
Nameplate watts are a maximum. Thermostat-controlled appliances (heaters, fridges, air conditioners) cycle on and off, so real use is often lower; a plug-in energy meter or the ENERGY STAR / EnergyGuide label gives a better figure. Bills also add fixed charges, taxes and tiered or time-of-use pricing that this estimate ignores.
Frequently asked questions
How do I find an appliance’s wattage?
Look for the nameplate on the back or bottom, or in the manual. If it lists only amps, multiply by the voltage (120 V for most U.S. outlets): watts ≈ volts × amps.
What electricity rate should I use?
Divide the total on your bill by the kWh used to get an all-in rate. The U.S. average residential price is published monthly by the EIA, broken down by state.
How much does standby power cost?
A device drawing 5 W around the clock uses 5 × 8,760 ÷ 1000 = 43.8 kWh a year, about $7.45 at $0.17/kWh.
Why is my fridge cheaper than this says?
A refrigerator’s compressor runs only part of the time. Enter the hours it actually runs, or take the yearly kWh from its EnergyGuide label and multiply by your rate.
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Sources
- Electricity explained: Use of electricity — U.S. Energy Information Administration
- Electric Power Monthly, Table 5.6.A: Average Price of Electricity to Ultimate Customers by End-Use Sector, by State — U.S. Energy Information Administration
- Energy units and calculators explained — U.S. Energy Information Administration
- ENERGY STAR certified products — U.S. EPA / U.S. Department of Energy ENERGY STAR program
Formulas are taken from the free public references above. Results are provided “as is” for informational and educational purposes only. See our disclaimer.
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