Electricity bills are opaque because they are charged in kilowatt-hours while appliances are labelled in watts. Bridging the two is the whole exercise: a kilowatt-hour is one thousand watts drawn for one hour, so an appliance's cost is its wattage, divided by a thousand, multiplied by hours of use, multiplied by your tariff.
Doing this for the five or six largest loads in a home usually explains most of the bill, and it consistently identifies different culprits than people expect. Heating, cooling, hot water and laundry dominate; phone chargers and standby lights are a rounding error.
The calculation
kWh = watts ÷ 1,000 × hours. Cost = kWh × rate. A 1,500 W space heater running six hours a day uses 9 kWh, and at 25 cents costs $2.25 a day — about $67 a month for one appliance. Where a device has a duty cycle rather than running continuously, such as a fridge or an air conditioner, use its average draw rather than its rated maximum or you will overestimate substantially.
Monthly cost of common appliances at 25¢/kWh
| Appliance | Power | Typical use | Monthly cost |
|---|---|---|---|
| Space heater | 1,500 W | 6 h/day | $67.50 |
| Air conditioner | 1,200 W | 8 h/day | $72.00 |
| Electric water heater | 4,000 W | 3 h/day | $90.00 |
| Tumble dryer | 3,000 W | 5 h/week | $16.25 |
| Refrigerator | 150 W avg | 24 h/day | $27.00 |
| Desktop PC | 250 W | 8 h/day | $15.00 |
| LED bulb | 10 W | 5 h/day | $0.38 |
Reductions that are actually worth making
- Heating and cooling setpoints: one degree of adjustment typically moves consumption by 3–5%, and costs nothing.
- Water heater temperature: 120 °F is sufficient for domestic use and safer than higher settings.
- Line-drying laundry: the dryer is usually the third-largest load in a home.
- LED replacement: an 85% reduction on lighting, though lighting is a small share of a modern bill.
- Standby power: real but modest — typically 5–10% of a household total across every device combined.
Tariffs change the answer
On a time-of-use tariff the same kilowatt-hour can cost three times more at 6pm than at 2am, which makes shifting the dishwasher and laundry overnight worth more than reducing consumption. On a tiered tariff the marginal rate rises once you pass a threshold, so the last hundred kilowatt-hours of the month are the expensive ones. Check which structure you are on before optimising, because the two reward completely different behaviour.
Related tools
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