Basics
How to Calculate Electricity Cost
To estimate appliance running cost, convert watts to kilowatts, multiply by hours used, then multiply by your electricity rate.
The formula
Cost = Watts / 1000 x Hours Used x Electricity RateWatts measure power. Kilowatt-hours measure energy over time. Your electric bill usually charges by kilowatt-hour, written as kWh.
Step-by-step method
Start by finding the appliance wattage. This may be printed on a label, listed in the manual, or shown in product specifications. If the device lists amps and volts instead of watts, multiply amps by volts to estimate watts.
Next, estimate how many hours the appliance actually runs. For a hair dryer or microwave, this may be minutes per use. For a space heater or air conditioner, it may be several hours. For appliances that cycle on and off, such as refrigerators or dehumidifiers, estimate active runtime rather than the full time plugged in.
Finally, use your electricity rate. A simple estimate can use the average cost per kWh from your bill. If you have time-of-use pricing, use the rate that applies when the appliance usually runs.
Example calculation
| Input | Example value |
|---|---|
| Appliance wattage | 1,500 watts |
| Usage time | 4 hours |
| Electricity rate | $0.17 per kWh |
| Estimated cost | $1.02 |
What can change the result?
Actual cost can change because appliances cycle on and off, use different settings, or draw less power after heating or cooling reaches a target. The calculator is best used as a planning estimate.
Daily, monthly, and yearly cost
| Period | How to estimate | Example from $1.02/day |
|---|---|---|
| Daily | Watts / 1000 x hours x rate | $1.02 |
| Monthly | Daily cost x 30 | $30.60 |
| Yearly | Daily cost x 365 | $372.30 |
Common mistakes to avoid
The most common mistake is mixing up watts and kilowatt-hours. Watts describe the appliance's power draw. kWh describes energy used over time. Another common mistake is using 24 hours for a device that cycles. That can overestimate the cost of refrigerators, freezers, heat pumps, and some water heaters.
It is also easy to overlook utility rate details. Some bills split electricity into supply, delivery, taxes, and fees. For everyday planning, an effective average rate from your bill is often more useful than only the supply rate.
Electricity cost FAQ
What is the easiest way to estimate appliance cost?
Use the appliance wattage, hours used, and your electricity rate. Divide watts by 1,000 to get kilowatts, multiply by hours, then multiply by cost per kWh.
Why does my actual bill not match the calculator exactly?
The calculator estimates appliance energy cost only. A bill can include other appliances, taxes, delivery charges, demand charges, seasonal rate changes, or time-of-use pricing.
Can I calculate cost from amps instead of watts?
Yes. Estimate watts by multiplying amps by volts, then use the same formula. For example, 10 amps at 120 volts is about 1,200 watts.
Use the formula in a calculator
These calculators show how wattage, hours, and rate change the final cost.
Related electricity guides
Learn the pieces behind the formula before comparing more appliances.