Your electricity bill can feel like a mystery, but it's calculated from a simple formula. Once you understand it, you can estimate costs for any appliance, find energy hogs in your home, and make smarter decisions about energy use.
The Core Formula
Electricity bills are measured in kilowatt-hours (kWh) — the unit your utility company uses to charge you.
Energy (kWh) = Power (W) ÷ 1,000 × Hours Used
Cost = Energy (kWh) × Rate ($/kWh)
Step 1: Find the Appliance Wattage
Check the label on the back or bottom of the appliance. You'll see something like "1200W" or "10A 120V" (in which case, watts = amps × volts = 10 × 120 = 1200W).
Step 2: Estimate Hours of Use Per Month
Think realistically: a TV might be on 4 hours/day × 30 days = 120 hours/month. A refrigerator runs 24/7 but its compressor only kicks on about 30–40% of the time.
Step 3: Find Your Electricity Rate
Check your utility bill for the "cost per kWh." The US national average is about $0.16/kWh, but it varies widely:
| State | Avg Rate (2024) |
|---|---|
| Hawaii | $0.38/kWh |
| California | $0.27/kWh |
| New York | $0.22/kWh |
| Texas | $0.14/kWh |
| Louisiana | $0.11/kWh |
Real-World Calculation Examples
Example 1: Central Air Conditioner
- Power: 3,500W (3.5 kW)
- Use: 8 hours/day × 30 days = 240 hours/month
- Energy: 3.5 × 240 = 840 kWh/month
- Cost at $0.16/kWh: $134.40/month
Example 2: LED vs. Incandescent Bulb (60W equivalent)
- LED: 8W × 5 hrs/day × 30 = 1.2 kWh → $0.19/month
- Incandescent: 60W × 5 hrs/day × 30 = 9 kWh → $1.44/month
- Savings per bulb: $1.25/month × 12 months = $15/year
Common Household Appliance Costs
| Appliance | Typical Watts | Est. Monthly Cost* |
|---|---|---|
| Refrigerator | 150W (avg) | $4–$8 |
| Electric water heater | 4,500W | $40–$60 |
| Clothes dryer | 5,000W | $10–$20 |
| Dishwasher | 1,800W | $4–$8 |
| Desktop computer | 200W | $5–$10 |
| 55" LED TV | 100W | $3–$6 |
| Phone charger | 10W | $0.20–$0.50 |
*Based on average US rate of $0.16/kWh at typical usage patterns.
Tips to Reduce Your Bill
- Switch to LED bulbs — 8x more efficient than incandescent
- Unplug vampire loads — TVs, gaming consoles, and chargers draw power when "off"
- Run laundry in cold water — heating water is 90% of the energy for a wash cycle
- Set AC to 78°F — every degree higher saves ~3% on cooling costs
- Use a smart power strip — cuts standby power to entertainment centers
Try the Electricity Bill Calculator
Free, instant results — no sign-up needed.