Working out what an appliance costs to run

Watts measure a speed, kilowatt-hours measure a distance

Nearly every mistake in appliance costing comes from confusing two different quantities that both feel like “how much electricity”. Power is the rate at which an appliance draws energy, measured in watts. Energy is the amount it has actually consumed, measured in watt-hours or, more usefully, kilowatt-hours. A car analogy holds up well here: watts are the speedometer and kilowatt-hours are the odometer.

Your retailer does not sell you watts. It sells kilowatt-hours, and the price on your bill is quoted in cents per kilowatt-hour. So a wattage on a label tells you nothing about cost until you pair it with a duration. A 2,400 W heater draws almost five hundred times as much power as a 5 W modem, yet over a year the modem that never switches off can cost more than a heater used twice.

One kilowatt is 1,000 watts, and one kilowatt-hour is one kilowatt sustained for one hour. Both units are part of the international system of units that Australia adopted through metrication, which is why nothing on an Australian bill is expressed in horsepower or British thermal units.

kilowatts  = watts ÷ 1,000
kWh used   = kilowatts × hours running
cost       = kWh used × rate in $/kWh
           = (watts ÷ 1,000) × hours × (c/kWh ÷ 100)

What common household appliances add up to over a year

The table below applies that formula to appliances most Australian households own, using a rate of 30 c/kWh throughout so the rows are comparable. The wattages are typical ranges drawn from the values OzCalc uses in its appliance picker, not measurements of your particular model. Your heater might be 1,200 W or 2,400 W; your dryer might be a heat-pump model that uses a third of what a vented one does. Read the compliance plate or the nameplate on the back of the appliance and substitute the real figure before you rely on any of this.

Two things stand out. The first is that the fridge — the appliance nobody thinks about — costs more over a year than the clothes dryer or the kettle, despite drawing a small fraction of the power of either, purely because it never stops. The second is that the nameplate is a poor guide to annual cost on its own. A 150 W fridge compressor outspends a 2,000 W kettle across a year because it accumulates thousands of running hours rather than a couple of hundred.

Thermostatically controlled appliances are exactly where the nameplate misleads. A fridge does not draw 150 W continuously; its compressor cycles, and the table above assumes it runs about a third of the time. Ovens, reverse-cycle air conditioners and hot water systems behave the same way, so multiplying their rated power by the hours the appliance is switched on overstates the cost, sometimes by a lot.

Why the daily supply charge is not part of the cost of boiling a kettle

An Australian residential bill has two structurally different charges. The usage charge is priced per kilowatt-hour and rises and falls with what you consume. The supply charge — also called the daily supply charge, service to property charge or fixed charge — is a set number of cents for every day you are connected, and it does not move at all when you use more or less electricity.

That distinction matters because the two charges answer different questions. If you want to know what your next bill will be, you need both: the usage charge on your consumption plus the supply charge multiplied by the number of days in the billing period. If you want to know what it costs to run one appliance, only the usage charge is relevant, because the supply charge would be identical if you unplugged the appliance and left the country.

Blending them produces answers that make no sense. Take a supply charge of $1.10 a day and allocate it to the two kettle boils that are the only thing you switched on. That is 55 cents a boil of supply charge on top of about 12 cents of actual energy, so the kettle appears to cost five times what it does. Allocate the same $1.10 across a quarter of ordinary household use and it disappears into the noise. The charge has not changed; only the arbitrary allocation has.

Single rate, time-of-use and controlled load

Which usage rate applies depends on the tariff your retailer has you on, and the tariff changes the answer to “when should I run this?” more than most people expect.

• Single rate, sometimes called a flat or anytime tariff, charges one price per kilowatt-hour regardless of the hour. Every kilowatt-hour is priced identically, so there is no cheaper time of day.
• Time-of-use splits the day into peak, shoulder and off-peak windows with a different rate for each. The windows are set by the network in your area, not by you, and the peak rate can be substantially higher than the off-peak one.
• Controlled load is a separately metered circuit — most often electric hot water, sometimes underfloor heating or a pool pump — switched on by the network during off-peak hours and billed at its own lower rate.
• Demand tariffs add a charge based on your highest half-hour or hour of consumption in the billing period, which penalises simultaneous heavy loads rather than total usage.

On a time-of-use tariff, shifting a dishwasher or a dryer from the peak window into off-peak genuinely reduces the cost of that load, because you are buying the same kilowatt-hours at a lower price. On a single-rate tariff the same behaviour change saves nothing at all. This is the single most common piece of household energy advice that is only true for some readers, and your bill tells you which reader you are.

Solar complicates the comparison in the other direction. If you have panels and you run the dishwasher in the middle of a sunny day, the relevant cost is not your usage rate at all — it is the feed-in tariff you gave up by consuming that energy instead of exporting it. That is usually much lower than the usage rate, which is why daytime running is cheaper for a solar household even on a flat tariff. The arithmetic is the same shape; only the price you plug in changes.

Standby power and the baseline you never switch off

Standby is the power a device draws while doing nothing useful: a television waiting for the remote, a set-top box keeping its guide current, a printer listening for a job, a phone charger left in the wall. Individually these are a few watts. Collectively they run every hour of every day, which is what makes them add up.

The arithmetic is unremarkable and that is the point. Five watts continuous is 0.12 kWh a day, 44 kWh a year, and about $13 at 30 c/kWh. Ten such devices is roughly $130 a year for electricity that produced nothing. Before hunting them down, though, be careful about what you switch off: a fridge, a smoke alarm, a security system and a modem you rely on are not standby loads in any useful sense.

Measuring beats guessing here. A plug-in energy meter that sits between the socket and the appliance reports actual watts and accumulated kilowatt-hours, which settles the cycling and standby questions that no nameplate can answer.

Reading your own rate off the bill

Every figure in this guide is only as good as the rate you feed it, and the rate is on your bill rather than in any general article. Australian retail electricity prices differ by state, by network area, by retailer and by plan, and they change often enough that quoting a national average would mislead more than it helps.

1. Find the usage or consumption section of your bill, not the summary. It lists each rate in cents per kilowatt-hour alongside the kilowatt-hours billed at that rate.
2. If more than one usage rate appears, note the time window attached to each. Peak, shoulder, off-peak and controlled load are separate prices, and the appliance you are costing may sit in only one of them.
3. Note the supply charge separately, in cents per day, and set it aside. It is for reconstructing a bill total, not for costing an appliance.
4. Check whether the rates shown include GST. Residential bills normally quote GST-inclusive figures, but business accounts often do not, and a 10% difference in the rate is a 10% difference in every answer.
5. Divide cents by 100 to get dollars per kilowatt-hour before multiplying. A rate of 30 c/kWh is $0.30 per kWh.

The government comparison service Energy Made Easy is the neutral place to check whether the plan behind those rates is competitive, and Moneysmart’s budgeting guidance is a sensible way to fold the resulting quarterly figure into household spending rather than treating it as a surprise each time the bill arrives.

What the OzCalc electricity calculator models, and what it leaves out

The electricity calculator takes a wattage, the hours in one use, how many uses you have a week, and your rate in cents per kilowatt-hour. It returns the energy and cost of a single use and then scales that to daily, weekly, monthly and annual figures. Weekly cost is multiplied by 52 for the year, daily is the weekly figure divided by 7, and monthly is the annual figure divided by 12 — so “monthly” is an even twelfth of a year, not the length of any particular calendar month.

The simplifications are worth stating plainly, because they are where a calculator estimate and a real bill part company.

• It assumes the appliance draws its stated wattage for the whole time it runs. Thermostats, compressors and start-up surges all break that assumption, so enter an average rather than a peak where you can.
• It uses one rate. If you are on a time-of-use tariff, run the appliance through the calculator once at the rate that applies when it actually runs, rather than averaging your rates together.
• It does not know about your daily supply charge, and deliberately so. Add that separately if you are rebuilding a whole bill.
• It does not model solar self-consumption, feed-in tariffs, demand charges, seasonal rate changes or concessions.
• It has no idea whether your appliance is efficient. It prices the energy you tell it about; comparing a heat-pump dryer with a vented one means running the calculator twice with two different wattages.

Where a percentage helps

Once you have an annual figure for an appliance, the percentage calculator is useful for the follow-up question: what share of the household bill is this, and what would a 20% price rise do to it? Both are simpler to reason about than they look, and both are more informative than the raw dollar figure on its own.

Common questions