How is electricity cost per kWh calculated?

Energy in kilowatt-hours equals watts divided by 1000 times hours of use. Multiply that by your rate per kWh to get the cost. Daily energy is scaled by 30.44 days for a month and 365.25 days for a year.

What is a kilowatt-hour?

A kilowatt-hour is the energy used by a 1000-watt load running for one hour. A 1500-watt heater run for four hours uses 6 kWh, which is what your utility bills you for.

How do two-tier rates work?

Many utilities charge a lower rate up to a monthly kWh threshold, then a higher rate above it. The calculator splits your monthly consumption across the limit, prices each portion at its rate, and reports the blended effective cost per kWh.

Why use 30.44 days for a month?

Using the average number of days per month (365.25 divided by 12) keeps the monthly figure consistent with the annual one, avoiding the rounding error that a flat 30 or 31 days would introduce.

Does this include standing charges or taxes?

No. The result reflects only the energy cost of the load at the per-kWh rate you enter. Fixed daily standing charges, connection fees and taxes are billed separately and should be added to estimate a full bill.

Electricity Cost Calculator

Knowing the running cost of a specific appliance or circuit makes it easy to decide whether to upgrade, time-shift or switch off a load. This calculator turns wattage, hours of use and your utility rate into hourly, daily, monthly and annual cost, and can model a two-tier tariff where the price steps up after a monthly threshold.

How it works

The core formula converts power and time into energy, then prices it:

kWh/day  = watts / 1000 × hours/day
cost/day = kWh/day × rate

Monthly and annual figures use average calendar lengths (30.44 and 365.25 days) so they stay consistent with each other. When two-tier pricing is enabled, the monthly kWh is split at the threshold:

cost/month = min(kWh, limit) × rate1 + max(0, kWh − limit) × rate2

and the tool reports the resulting blended effective rate.

Worked example

A 1500 W space heater run 4 hours a day at $0.17/kWh:

kWh/day  = 1500 / 1000 × 4 = 6 kWh
cost/day = 6 × 0.17 = $1.02
cost/month = 6 × 30.44 × 0.17 ≈ $31.05
cost/year  = 6 × 365.25 × 0.17 ≈ $372.55

Tips and notes

For variable loads, use an average wattage or a metered reading rather than the nameplate maximum, which is usually a peak figure. The result covers energy only; add fixed standing charges and taxes for a full bill estimate. To compare two appliances, hold the hours and rate constant and change only the wattage, the per-hour cost scales directly with power.