Electricity Cost Calculator

About Electricity Cost Calculator

How the Electricity Cost Formula Works

The basic formula for calculating electricity cost is straightforward:

Cost = (Watts x Hours) / 1,000 x Rate per kWh

The division by 1,000 converts watt-hours to kilowatt-hours (kWh), which is the standard billing unit on electricity bills worldwide. A kilowatt-hour represents the energy used by a 1,000-watt appliance running for one hour, or equivalently, a 100-watt appliance running for ten hours.

Worked example (UK): A 2,000W electric heater running 5 hours per day at the current Ofgem price cap rate of 24.67p/kWh (April-June 2026; rising to 26.11p from 1 July):

Daily kWh: (2,000 x 5) / 1,000 = 10 kWh

Daily cost: 10 x £0.2467 = £2.47

Monthly cost: £2.47 x 30 = £74.01

Yearly cost: £2.47 x 365 = £900.46

That single heater running five hours a day costs over £900 per year - more than half the average Ofgem price cap of £1,641 per year for a typical dual-fuel household.

Worked example (US): A 1,500W window air conditioner running 8 hours per day at the US average of $0.18/kWh (EIA, early 2026):

Daily kWh: (1,500 x 8) / 1,000 = 12 kWh

Daily cost: 12 x $0.18 = $2.16

Monthly cost: $2.16 x 30 = $64.80

Yearly cost (assuming 5 months of summer use, ~150 days): $2.16 x 150 = $324.00

Common Appliance Running Costs

The table below uses the current UK Ofgem cap rate of 24.67p/kWh (Q2 2026) and the US EIA average of $0.18/kWh. Actual costs depend on your tariff, region, and how heavily the appliance cycles on and off.

Appliance	Watts	Typical Hours/Day	Annual Cost (UK)	Annual Cost (US)
LED light bulb	10W	6	£5	$4
Old incandescent bulb	60W	6	£32	$24
Television (55")	100W	4	£36	$26
Desktop computer	200W	8	£144	$105
Laptop	50W	8	£36	$26
Refrigerator (always on)	150W avg	24	£324	$236
Washing machine	500W	1 (per load)	£45	$33
Tumble dryer	2,500W	1 (per load)	£225	$164
Electric oven	2,000W	1	£180	$131
Electric shower	8,500W	0.25 (15 min)	£191	-
Space heater	1,500W	5	£676	$493
Air conditioner (window)	1,200W	8	£866	$631
Electric car charger (L2)	7,200W	3	£1,945	$1,418

Heating and cooling are by far the biggest electricity consumers. A space heater or air conditioner running several hours daily can easily be the single most expensive appliance in a home. The EV charging cost calculator breaks down charging costs in more detail if you own an electric vehicle.

Electricity Rates Around the World

Electricity prices vary enormously by country, driven by energy mix, taxation, infrastructure costs, and government policy. Here are current averages as of early 2026:

Country/Region	Avg Rate per kWh	Avg Household kWh/Year	Avg Annual Bill
UK	24.67p (Ofgem Q2 2026)	~3,450 kWh	~£851
US (average)	$0.18 (EIA 2026)	~10,500 kWh	~$1,890
Germany	~€0.38	~3,000 kWh	~€1,140
France	~€0.24	~4,600 kWh	~€1,104
Australia	~A$0.26	~5,800 kWh	~A$1,508

US households use roughly three times more electricity than UK households, largely because of air conditioning, larger homes, and more widespread use of electric dryers. Germany has among the highest per-unit rates in the world but relatively low consumption, so annual bills are broadly similar to the US despite the price gap.

Within the US, rates range from around 12 cents/kWh in Louisiana to nearly 40 cents/kWh in Hawaii, according to EIA data. In the UK, the Ofgem price cap sets maximum unit rates that most standard-tariff customers pay, though fixed deals may be higher or lower.

What Uses the Most Electricity in a Home?

According to the US Department of Energy and the UK Energy Saving Trust, household electricity use typically breaks down as follows:

Category	Share of Bill (US)	Share of Bill (UK)
Heating and cooling	40-50%	15-25% (most heat with gas)
Water heating	12-15%	10-15% (if electric)
Refrigeration	6-8%	8-12%
Lighting	8-10%	10-15%
Cooking	3-5%	5-8%
Laundry and drying	5-8%	8-12%
Electronics and standby	8-12%	10-15%

The big difference between the UK and US is heating - most UK homes heat with gas boilers, so electricity bills are dominated by appliances, lighting, and cooking. In the US, electric heating and air conditioning make up the single largest category. This is also why average US household consumption is roughly triple the UK figure.

Biggest Savings Opportunities

• Lighting: Replacing a single 60W incandescent bulb with a 10W LED saves about £27 per year at UK rates (24.67p/kWh, 6 hours/day). A house with 20 bulbs making the switch saves over £540 per year. LEDs also last 15,000-25,000 hours compared to roughly 1,000 hours for incandescents.
• Tumble dryer: At 2,500W per load, tumble dryers are among the most expensive appliances to run. Air-drying clothes saves roughly £225 per year (UK) or $164 per year (US) for daily use. Even halving dryer use makes a noticeable difference.
• Standby power: Devices left on standby (TVs, game consoles, chargers, set-top boxes) quietly drain power around the clock. Research from Go.Compare Energy (2025) estimates the average UK household wastes around £80 per year on standby power. Smart power strips that cut standby draw can recoup their cost within months.
• Heating thermostat: The Energy Saving Trust estimates that reducing the thermostat by 1 degree C saves roughly 3-4% on heating costs. For a household spending £800 per year on heating, that is £24-32 saved for a single degree adjustment.
• Washing temperature: Washing clothes at 30 degrees C instead of 40 degrees C uses about 40% less electricity per cycle. Over a year of daily washes, that adds up to roughly £18 in savings at UK rates.
• Off-peak tariffs: If you have a smart meter, time-of-use tariffs can offer cheaper electricity during off-peak hours (typically overnight and weekends). Running the dishwasher, washing machine, and EV charger during off-peak windows can reduce costs. Economy 7 tariffs in the UK offer lower overnight rates, saving around £50 per year for households that shift 40% or more of usage to nighttime hours.

ENERGY STAR and EU Energy Labels

Energy efficiency ratings translate directly into running cost savings. According to the US ENERGY STAR programme, certified appliances use 10-50% less energy than standard models. Over the lifetime of a product, an average household choosing ENERGY STAR across all appliances saves about $450 per year.

Specific savings by appliance type:

• Refrigerators: ENERGY STAR models are about 15% more efficient than the minimum federal standard
• Clothes washers: Certified models use about a third less energy and half the water of standard washers
• Dishwashers: 10% more energy-efficient and 20% more water-efficient than conventional models
• Room air cleaners: 40% more energy-efficient than standard units

In the EU and UK, the rescaled energy label (A to G, introduced in 2021) makes it easier to compare appliances. An A-rated fridge-freezer might use 120 kWh per year (roughly £30 at current UK rates) while a lower-rated model uses 300 kWh per year (£74). Over a 10-year lifespan, that difference adds up to more than £440.

Tips for Accurate Cost Estimates

The calculator above gives a good baseline, but real-world costs can differ for a few reasons:

• Cycling appliances: Fridges, freezers, and air conditioners cycle on and off throughout the day. A fridge rated at 150W does not draw 150W continuously - it might average closer to 40-60W when the compressor duty cycle is factored in. Use the average wattage (often listed on the energy label) rather than the peak draw.
• Seasonal variation: Heating costs spike in winter, AC costs in summer. For the most accurate yearly estimate, calculate seasonal appliances based on months of actual use rather than a full 365 days.
• Standing charges: Your electricity bill includes a daily standing charge (57.21p/day in the UK under the Q2 2026 Ofgem cap) on top of per-unit costs. This calculator focuses on the per-unit running cost of individual appliances, not the standing charge.
• Tariff structure: If you are on a time-of-use tariff, the rate changes throughout the day. Use the rate for the time of day the appliance typically runs.

It is also worth noting that electricity rates remain well above pre-crisis levels. The UK Ofgem cap peaked at 34p/kWh in early 2023 and stands at 24.67p/kWh for April-June 2026, with Ofgem confirming a rise to 26.11p/kWh from 1 July 2026 (a 13% increase in the typical annual bill, from £1,641 to £1,862). US rates have climbed from an average of around 13 cents/kWh in 2020 to roughly 18 cents/kWh in 2026, driven by natural gas prices, grid modernisation investments, and increased demand from data centres and EV charging infrastructure.

To convert between watts and amps for sizing circuits and extension cords, the watts to amps calculator handles the conversion. For tracking overall household spending, the budget calculator can help fit energy costs into a broader financial plan. And for vehicle fuel costs, the fuel cost calculator covers petrol and diesel expenses.

Sources

• Ofgem - Energy Price Cap Q2 2026 (24.67p/kWh electricity)
• Ofgem - Energy Price Cap Q3 2026 (26.11p/kWh from 1 July)
• US EIA - Electric Power Monthly (average residential rate ~18c/kWh)
• US EIA - Average US household electricity consumption (~10,500 kWh/year)
• Go.Compare Energy - Standby power costs (£80/year average)
• ENERGY STAR - Appliance efficiency savings (10-50% reduction)