How to Calculate the Cost Per Watt

How much does 400 watts cost?
••• Watt image by Ewe Degiampietro from Fotolia.com

Calculating the cost per watt can really save you money. After you know the cost per watt of each of your appliances and electronic devices, you can determine the ones that cost the most and the ones you use the most. With this information, you can drop your energy bill down quickly.

If you're building an alternative energy system for your home or business, this information will also help you lower costs. The cost per watt information will let you design, build and operate a system that doesn’t need to supply as much power, which costs less all around.

    Look up the cost per kilowatt hour on an electrical appliance or electronic device table. Electric utility suppliers, appliance companies and government agencies have cost per kilowatt tables. These tables list the appliance name in one column and the cost per kilowatt-hour to operate the appliance in the other. However, you must check to see if the cost per kilowatt-hour given is the same as what your electric utility company charges.

    Look up the cost per kilowatt-hour that your utility company charges you. Often these tables will list the cost per kilowatt-hour based on a fixed electric rate. Some utility companies base this rate on a national average and others use different criteria. Many electric utilities charge a base rate for a fixed amount of kilowatt-hour use per month. When you exceed that rate, a higher kilowatt-hour rate is charged for the amount over that base amount.

    Adjust your cost per kilowatt-hour rating, depending on what your utility company pricing policy is. This may also depend on the time of day or month of the year you use your appliance. Electric rates can vary for different times of day and different times of the year.

    Convert the cost per kilowatt-hour to cost per watt-hour. Divide the cost per kilowatt-hour that your utility company charges by 1000. This will give you the cost per watt-hour. If your cost per kilowatt-hour was $0.1, which is a dime, your costs per watt-hour would be $0.0001, or one-hundredth of a penny. In other words, your cost is about one-hundredth of a penny per watt. If your electronic device is rated at 1000 watts and it is on for one hour, the charge to use it would be $0.1 or ten cents, since 1000 times 0.0001 is 0.1.

    Things You'll Need

    • Calculator
    • Electric rate charts
    • Appliance kilowatt hour charts

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