kWh Cost Calculator Formula
Understand the math behind the kwh cost calculator. Each variable explained with a worked example.
Formulas Used
All-In Rate
all_in_rate = effective_rateVariable Rate
variable_rate = usage_rateFixed Charge Share
fixed_pct = fixed_charges / total_bill * 100Projected Annual Cost
annual_cost = total_bill * 12Variables
| Variable | Description | Default |
|---|---|---|
total_bill | Total Electric Bill(USD) | 150 |
kwh_used | Electricity Used(kWh) | 900 |
fixed_charges | Fixed Monthly Charges(USD) | 15 |
effective_rate | Derived value= total_bill / kwh_used | calculated |
usage_rate | Derived value= (total_bill - fixed_charges) / kwh_used | calculated |
How It Works
How to Calculate True kWh Cost
Your true electricity cost includes more than just the generation charge.
Formula
All-In Rate = Total Bill / kWh Used
Variable Rate = (Total Bill - Fixed Charges) / kWh Used
Bill Components
Worked Example
A $150 electric bill for 900 kWh with $15 in fixed charges.
- 01All-in rate: $150 / 900 = $0.1667/kWh
- 02Variable rate: ($150 - $15) / 900 = $0.1500/kWh
- 03Fixed charge share: $15 / $150 = 10%
- 04Annual cost: $150 * 12 = $1,800
Frequently Asked Questions
What is the average cost per kWh in the US?
The US average is about $0.15/kWh, but varies widely from $0.08 in Louisiana to $0.35 in Hawaii. Time-of-use rates can range from $0.05 off-peak to $0.40 on-peak.
Why is my rate different from the posted rate?
Posted rates usually show only the generation charge. Your actual rate includes delivery, taxes, demand charges, and fixed fees, making it 20-40% higher.
What are demand charges?
Demand charges are based on your peak power draw (kW) rather than total energy (kWh). They are common in commercial bills and can represent 30-50% of the total.
Ready to run the numbers?
Open kWh Cost Calculator