How to work out your electricity costs
With household bills constantly rising due to the cost of living crisis, you may want to gain some clarity into where your money is going. Understanding your electricity costs can help you see exactly how much money you are being charged for your home. This can help you determine where to reduce your electricity usage and can help when you want to switch providers. Getting to grips with it can be overwhelming at first, but in a few straightforward steps you can see exactly how much money you are being charged for your electric.
How to understand your electric bill
Typically, all energy bills will include the name of your tariff, your billing period, and your energy use for that period. This is measured in kilowatt-hours (kWh). For calculating how much your electricity costs, the most important numbers on your bill are the present meter readings and previous meter readings. The difference between these two figures is the number of units used.
Electricity bill break down:
- Meter reading: this is the total electricity used over the billing period. This figure is essential for calculating how much electricity you have used.
- Cost per kilowatt-hour (kWh) - this is the price you pay for each unit of electricity
- Tariff and charges: your bill may include various tariffs and additional charges. Tariffs can be fixed, meaning you pay a constant rate, or variable, meaning that the rate you pay changes. Additional charges included on your bill can include delivery fees, environmental surcharges, or taxes.
- Total amount: this is the final sum you owe for that billing period. Understanding how it is calculated can help you manage your energy use better.
How to work out electric costs
To work out how much your electricity costs, start by finding your electricity meter and make a note of the readings at the beginning and end of your billing period. Alternatively, you can use the present and previous meter reading figures included in your electricity bill. Then subtract the start reading from the end reading to calculate the number of kWh used. This will give you the total electricity you have used in this period.
Next, multiply the number of kWh used by the cost per unit, which can be found on your bill. Once you have done this, make sure to account for any extra charges and finally add this to your total electricity charge if applicable.
Why work out your electricity costs?
There are several advantages to working out your electric costs. It allows you to track your spending and see exactly how much money is going to your electricity. This can also help you spot any errors or discrepancies.
It allows you to find ways to save money by noticing patterns in your electricity usage, such as high consumption during peak times. This can help you change and adapt your usage to save money. It can also help you see how much certain appliances are costing and make decisions on switching them out for newer, more efficient models.
It can also help you evaluate your electricity plan and find the best plan for your house, as well as reduce your home's environmental impact by helping you to conserve energy.
How to save on electricity costs
There are a whole range of small adjustments you can make to save on your electricity costs, such as:
- Switching to LED bulbs: replacing incandescent bulbs with LED bulbs can cut electricity usage by up to 75%
- Unplug electronics: TVs, computers, and chargers continue to eat up electric even when turned off. Unplugging devices when not in use can be a small way to help you save.
- Turn off the lights: when you leave a room, turn the lights off, even if you won’t be gone for long.
- Seal up drafts: check for drafts near windows and doors and seal them up. This prevents heat escaping in the winter and cool air leaving in the summer.
- Wash your clothes in colder water: heating up water for washing your clothes can use a surprising amount of energy.
These are just a few of the small changes you and your family can make to help you save on your electricity bill. Once you have calculated your electricity costs, you will be able to make more smart and efficient choices on how you save electricity.
Fair for You - Helping you keep your energy costs down
Want to know how much it costs to run your household appliances? Check out our blog post below where we detail how much it costs to run your everyday appliances such as ovens and dishwashers!
At Fair for You, we are committed to helping you save as much money and energy as you can. That’s why we have a range of different articles on our blog discussing a whole array of different subjects and topics.
Explore more of our blog and start implementing easy ways to save today!
If you’re struggling to pay your energy bills, support is available. Visit
Citizens Advice or GOV.UK or get in touch with your energy provider to see what help you can access.