How to Calculate What an Appliance Costs to Run: Watts, kWh, and Your Electric Bill

The Formula

Daily cost = (watts ÷ 1,000) × hours per day × price per kWh. Monthly cost = daily cost × 30. Find the price per kWh on your bill; it may include delivery charges and vary by time of day or usage tier, so use the all-in average rate (total bill divided by total kWh) for the most realistic estimate. Wattage appears on the device label, in the manual, or on the plug. If only amps and volts are shown, watts = volts × amps.

Devices with motors or compressors, like refrigerators and air conditioners, cycle on and off. Their average consumption is lower than their rated power. Multiply by the fraction of time they run (the duty cycle) or use an energy meter for accuracy.

Examples

A refrigerator rated at 150 watts that runs about 40% of the time uses 150 × 24 × 0.4 ÷ 1,000 = 1.44 kWh a day, or about 526 kWh a year, costing $84 at $0.16. A 55-inch TV drawing 100 watts for 5 hours a day uses 0.5 kWh a day, about 183 kWh and $29 a year. A laptop at 50 watts for 8 hours a day costs about $23 a year. A window air conditioner at 1,000 watts for 6 hours a day costs 6 kWh × $0.16 = $0.96 a day.

Phantom or standby loads, often 5 to 10 watts per device, add up across a home with dozens of devices: 100 watts of standby power running all year is 876 kWh, around $140.

Do Efficiency Upgrades Pay Off?

Replace a 60-watt incandescent bulb with a 10-watt LED that gives the same light. It saves 50 watts. If it runs 3 hours a day, that is 50 × 3 × 365 ÷ 1,000 = 54.75 kWh a year, or $8.76 at $0.16. An LED bulb costing $2 pays for itself in under three months. Across 20 bulbs, you save about $175 a year.

For larger purchases, compare the annual operating costs. A new refrigerator that uses 300 kWh a year instead of 600 saves about $48 a year at $0.16, so a $900 replacement of a working appliance would take almost 19 years to pay off from energy savings alone, unless the old unit is failing or inefficient.

Space Heating Cost Comparison

Electric resistance heating converts nearly all the electricity to heat, and 1 kWh makes 3,412 BTU, so a million BTU takes 293 kWh. At $0.16 per kWh, that costs $46.89. A natural gas furnace at 95% efficiency delivers 95,000 BTU from each 100,000-BTU therm, so at $1.50 per therm a million delivered BTU costs about $15.79. Use your local prices for a fair comparison, and note that heat pumps deliver 2 to 4 units of heat per unit of electricity, which can make them much cheaper than resistance heating, and competitive with gas in many regions.

Auditing Your Home

Use a plug-in energy monitor on suspect devices, check the largest loads (heating, cooling, water heating, dryers), and use your utility's online usage data to see patterns by time of day. If your rates vary by time of use, shift flexible loads such as laundry and dishwashing to off-peak periods.