How to Calculate Your Electric Bill

Electricity is a major expense for many consumers. From 2021 to 2022, the average monthly residential electric bill increased from $121 to $137. When adjusted for inflation, that's a 40-year high! These increases were driven by a 34% rise in the cost of fossil fuels used to operate power plants.

Given its impact, energy consumption certainly affects your household budget. Therefore, it is wise to understand your patterns of energy usage. Employ that knowledge to reduce your energy consumption and save money.

Key Takeaways

• You can calculate your energy usage by finding appliances' power ratings, estimating usage time, and multiplying by your utility's per kWh rate. Major appliances like HVAC, hot water, washer/dryer, and kitchen appliances account for the majority of your usage.
• Reduce consumption by upgrading insulation, switching to LED bulbs, using smart home devices, upgrading appliances, and changing usage habits.
• Use tools like the DOE's Home Energy Saver and Price to Compare to understand your usage, find savings opportunities, and select the best energy plan.
  

Why is Energy Consumption Important?

First of all, what does the term “energy consumption” mean? It refers to the electricity you use to power your appliances, operate your lights, and more. It also includes the natural gas (when applicable) needed to heat the home, run a gas stove, and provide hot water.

Electricity consumption is measured in kilowatt hours (kWh). A kilowatt hour is the amount of electricity needed to operate a 1,000 watt appliance for one hour. Natural gas consumption is measured in therms. Burning about 100 cu ft of natural gas generates one therm of energy.

Reducing your energy consumption saves you money while reducing your carbon footprint. Only 22% of the electricity generated in the United States is from renewable sources, while a staggering 60.2% is from traditional fossil fuels: coal (19.5%), natural gas (40.8%), and oil (0.9%).

If you live in a deregulated state, you can save money by selecting the right energy supplier. Which one should you choose? Fortunately, Price to Compare simplifies the comparison process!

How to Measure Home Electricity Usage

Figure out how much electricity you use around your home. Note the power rating of each device and estimate how much you use it. A device’s power rating specifies the wattage a device draws from the grid. Here are some typical power ratings:

• Electric stove – 1000W to 3000W
• Full-size refrigerator – 300W to 800W
• Microwave oven – 600W to 1100W

Find the power rating on an appliance’s nameplate, in the owner’s manual, or on the manufacturer’s website. You can also use a wattage meter.

Refer to an appliance’s Energy Guide Label (EGL) to simplify the process. The EGL estimates average annual electricity use. Refine your estimates by logging usage, particularly by energy-hungry appliances. Additional methods to improve accuracy include recording cooking times or how long various lights or appliances are in use.

Streamline the process by using the Department of Energy’s Annual Energy Calculator.

How to Calculate Your Electric Bill

Your energy provider charges you for each kilowatt hour of electricity consumed. Estimate your monthly electric expense by calculating major sources of electricity use. Examples include: HVAC, hot water heater, washer/dryer, and kitchen appliances.

Accurately estimating the kilowatt hours each uses per day is key. Get the item’s daily energy consumption by multiplying its wattage by the hours you use it every day, on average:

Approximate the average monthly cost to operate the device. Multiply daily consumption by 12, and multiply this figure by your utility’s rate per kWh.

Residential electricity rates continue to trend upward. As of June 2023, the average U.S. rate was 16.11 cents per kWh, up from 15.40 cents a year earlier. Get your state’s information here.

Electrical Usage of Common Household Appliances

Estimate the power usage of TVs, lighting, air conditioning, kitchen appliances, and more.

Televisions

Modern energy-efficient LED TVs only use a fraction of the electricity required by older plasma TVs. A typical 55-inch 4K LED TV uses about 60-80 kWh of electricity per year. Reduce power consumption by turning TVs off when not in use. Plug them into smart power strips to reduce “standby” electricity usage. In general, larger screens are more power hungry. Also, newer 8K LED TVs use more electricity than 4K LED models.

Air Conditioning

To calculate the kWh consumed by your air conditioner, determine the AC tonnage and the SEER rating. For example, a 20 SEER, four-ton air conditioner would use 57.6 kWh of electricity in 24 hours. At 16.4 cents per kWh, that’s about $9/day.

Reduce air conditioning use by:

• Raising your thermostat setting by several degrees
• Installing a smart thermostat to reduce usage when you’re not home
• Open and close vents to send the conditioned air where you most need it

Kitchen Appliances

Your kitchen appliances are high wattage devices that account for roughly 10-20% of your electric bill. Reduce energy use by investing in the latest, most energy-efficient models.

Approximate power consumption per month:

• Refrigerator: 40-60 kWh
• Oven/stove (one hour per day) 40-60 kWh
• Dishwasher (one load per day) 35-50 kWh
• Microwave (five minutes per day) 2-4 kWh

Washer and dryer

Assuming an average of one load per day, daily consumption will average about 150-170 kWh. Carefully estimate usage as it varies greatly from one household to another. Do laundry during off-peak hours when rates are lower, if possible.

Lighting

According to the Department of Energy, lighting accounts for about 15% of a typical residential electric bill. Reduce your costs by replacing incandescent bulbs in your home with LEDs. The latter typically use 80-90% less electricity. Compare a 60W incandescent bulb with a 12W LED of a similar brightness. At $0.13 per kilowatt hour, the incandescent bulb will cost $7.80 to operate for 1,000 hours, while the LED will cost just $1.56.

LEDs also last much longer than incandescents. They also reduce your AC costs because they do not emit heat like incandescent light bulbs do.

Other Factors

There are other major variables that impact residential energy consumption. For example, newer homes are often more energy-efficient than older ones. Larger households tend to consume more energy than smaller ones for HVAC usage. Those who work from home, or are at home more for other reasons, tend to use more electricity.

How to Reduce Your Energy Consumption

Consider these ideas for reducing your energy consumption:

• Upgrade insulation; seal leaks
• Switch from incandescent to LED light bulbs
• Use smart thermostats, lights, and power strips
• Close off lesser-used rooms
• Optimize your refrigerator and freezer temperatures at 37 °F and 0°F, respectively
• When possible, upgrade to new, more energy-efficient devices

Learn more at the Department of Energy’s Home Energy Saver website. Save money by selecting the right energy plan with Price to Compare.

Find the Best Plans Using Price to Compare

Rising energy costs make it increasingly important to understand and manage your energy consumption. Once you’re an educated energy consumer, you’re in a position to reduce your electric bills. This puts money in your pocket for other important pursuits!

Use Price to Compare to find the best energy plans for your needs.