How electricity cost is calculated
Electricity is billed per kilowatt-hour (kWh) — one kilowatt running for one hour. The formula is daily cost = (watts ÷ 1000) × hours per day × rate per kWh. A 1000-watt heater run 5 hours a day at $0.15/kWh costs (1 kW × 5 h) × $0.15 = $0.75 a day, or about $22.50 a month. Appliance ratings given in horsepower can be converted with the kilowatts to horsepower calculator.
How to use this calculator
Enter the appliance's power in watts (check the label or nameplate), the hours per day you run it, and your electricity rate per kWh (on your utility bill). The result is the daily cost, with an estimated monthly cost below. Comparing appliances this way is like comparing grocery value with the unit price calculator. Driving costs work the same way per mile in the gas cost calculator.
Worked example
A 60-watt bulb left on 8 hours a day at $0.20/kWh: (60 ÷ 1000) × 8 × 0.20 = $0.096 a day, about $2.88 a month. Swapping to a 9-watt LED cuts that to roughly $0.43 a month. Small wattages add up across many devices, so the running-cost view helps prioritise what to switch off.
One caveat: the wattage on the nameplate is the maximum draw. Thermostat-controlled appliances such as fridges, air conditioners and space heaters cycle on and off, so a 1,500 W heater may only pull full power a third of the time. For those, use realistic run hours rather than the clock hours the device is switched on.
Frequently asked questions
- How do I calculate the cost to run an appliance?
- Divide watts by 1000, multiply by hours used per day, then by your rate per kWh. A 1000 W device for 5 hours at $0.15 is $0.75 a day.
- What does a 1000-watt device cost per day?
- Run 5 hours a day at $0.15/kWh it costs $0.75 daily, around $22.50 a month.
- Where do I find my electricity rate?
- Your utility bill lists the price per kWh. It is often $0.10–$0.30 depending on your region and plan.
- How is the monthly cost estimated?
- The calculator multiplies the daily cost by 30 days. Your bill may differ slightly with month length and usage changes.
- Do UK and EU electricity rates work in this calculator?
- Yes — enter your own rate in whatever currency you are billed in. UK and EU households typically pay around £0.24 or €0.28 per kWh against a US average near $0.16, so the same appliance can cost roughly twice as much to run.