What Is a Kilowatt-Hour (kWh)? How to Calculate Electricity Cost

A kilowatt-hour (kWh) is the unit utilities use to measure how much electricity you use: it equals 1,000 watts of power used for one hour. To estimate the cost of anything electric, multiply its watts by the hours you use it, divide by 1,000 to get kWh, then multiply by your price per kWh. With the US average residential price at 18.16¢ per kWh, that simple formula lets you estimate the cost of almost any appliance.

What is a kilowatt-hour?

The U.S. Energy Information Administration (EIA) defines the basic units this way (EIA: Measuring electricity):

• Watt (W) – the unit of electric power. One watt is a very small amount of power.
• Kilowatt (kW) – "One kilowatt is equal to 1,000 Watts."
• Watthour (Wh) – "the energy of one Watt used for one hour."
• Kilowatthour (kWh) – one kilowatt of power for one hour, or 1,000 watthours.

EIA adds that electric utilities and power plants "generally measure electricity in kilowatthours," which is why kWh is the number on your meter and your bill.

kW vs. kWh: power vs. energy

The two terms sound alike but measure different things:

• kW (power) is how fast a device uses electricity at a given moment. A heater rated at 1,500 watts draws 1.5 kW while it runs.
• kWh (energy) is how much electricity is used over time. That 1.5 kW heater running for two hours uses 3 kWh.

A useful comparison: kW is like your car's speed; kWh is like the distance you drive. Your bill charges you mostly for the "distance" (kWh). Some rate plans also include a demand charge based on peak kW, but North Carolina's Public Staff notes that most residential customers do not have one (NC Public Staff).

How to calculate kWh for any appliance

The Department of Energy's Energy Saver program gives a three-step method (DOE Energy Saver):

1. Daily kWh = wattage × hours used per day ÷ 1,000
2. Annual kWh = daily kWh × number of days used per year
3. Annual cost = annual kWh × your utility rate per kWh

DOE's own worked example uses an electric kettle: 1,500 W × 1 hour ÷ 1,000 = 1.5 kWh per day; 1.5 × 365 = 547.5 kWh per year; and at an example rate of $0.11 per kWh, about $60.23 per year (DOE). That rate is just DOE's example. Swap in your own rate from your bill.

Where to find an appliance's wattage

According to DOE, the wattage is usually stamped on the bottom, back or nameplate of the appliance and represents the maximum power it draws. Many appliances have several settings, so actual use depends on the setting (a fan on high draws more than on low). If only amps are listed, multiply amps by volts: most U.S. appliances run on 120 volts, while large ones such as clothes dryers and electric cooktops use 240 volts (DOE). DOE's paper shredder example shows the method: 120 V × 3 A = 360 W.

Measure it instead of guessing

Because nameplate wattage is a maximum, the most accurate approach is to measure. DOE notes that plug-in electricity usage monitors cost around $25 to $50 at most hardware stores and can measure any device that runs on 120 volts, though not 240-volt appliances such as electric dryers, central air conditioners or water heaters. Some monitors will calculate cost if you enter your rate (DOE).

Worked examples

The examples below use the DOE formula. The wattages and hours are illustrative inputs, not measurements of any specific product, and the cost column uses an example rate of 15¢ per kWh so you can see the math. Replace both with your own numbers.

Example device and use	Calculation	kWh per day	Cost per day at 15¢	Cost per 30 days at 15¢
1,500 W device, 1 hour/day	1,500 × 1 ÷ 1,000	1.5	$0.225	$6.75
100 W device, 5 hours/day	100 × 5 ÷ 1,000	0.5	$0.075	$2.25
40 W bulb, 5 hours/day	40 × 5 ÷ 1,000	0.2	$0.03	$0.90
900 W device, 8 hours/day	900 × 8 ÷ 1,000	7.2	$1.08	$32.40

The 40-watt bulb row matches EIA's own example: a 40-watt (0.04 kW) bulb used for five hours uses 200 Wh, or 0.2 kWh (EIA).

How to calculate your electricity cost per kWh

To get an accurate result, you need the right rate. There are two ways to read it from your bill:

1. Marginal rate: add up every per-kWh charge on your bill (supply, distribution, transmission and per-kWh riders). This is what one more kWh costs you, and it is the best number for appliance estimates.
2. All-in average rate: divide your total electric charges by total kWh. This includes the fixed customer charge, so it is higher in low-usage months.

Fixed charges do not change with usage, which the Department of Energy notes is why lowering them is "usually not possible" (DOE). For appliance math, the marginal rate is usually closer to reality. Our guide How to read your electric bill shows where each charge appears.

How many kWh does a home use?

EIA reports that in 2022 the average U.S. residential utility customer bought 10,791 kWh, about 899 kWh per month. Use varied widely, from about 6,178 kWh per year in Hawaii to 14,774 kWh in Louisiana (EIA FAQ). EIA also notes that purchases can understate actual use in homes with rooftop solar. More recent live data shows the average US home used 1,152 kWh in August 2026.

To see what a kWh costs where you live, check our electricity rates by state. Prices vary a lot: EIA's 2025 annual averages ranged from 8.20¢ per kWh in North Dakota to 35.72¢ in Hawaii across all sectors (EIA).

Why prices per kWh differ so much

EIA explains that electricity prices reflect the cost to build, finance, maintain and operate power plants and the grid, with generation the largest component. Fuel costs, weather and state regulation all play a role, and prices are usually highest in summer when demand is high. Residential customers also pay more per kWh than industrial customers, largely because distributing electricity to homes costs more (EIA). That is why the same appliance can cost noticeably more to run in one state than another.

Common kWh conversions

• Watts to kW: divide by 1,000 (2,500 W = 2.5 kW).
• kW × hours = kWh (2.5 kW for 4 hours = 10 kWh).
• Watt-hours to kWh: divide by 1,000 (200 Wh = 0.2 kWh).
• Amps to watts: amps × volts (12 A × 120 V = 1,440 W). To go the other way, divide watts by volts.
• Larger units: EIA notes 1 MW is 1,000 kW and 1 GW is 1,000 MW, units used for power plants rather than homes.

Common mistakes when estimating electricity cost

• Treating nameplate watts as constant. Devices with thermostats or compressors (refrigerators, AC units, heaters) cycle on and off, so they don't draw full power every hour they are "on."
• Forgetting standby power. DOE notes many appliances keep drawing a small amount of power when switched off (DOE). See our guide to phantom power.
• Using only the supply rate. Delivery charges are usually billed per kWh too, so leaving them out underestimates cost.
• Ignoring time-of-use pricing. If your plan charges more at peak times, the same kWh can cost different amounts depending on when you use it.

Next steps

Use our kWh calculator to convert watts and hours into kWh, then run the number through the electricity cost calculator with your state's rate. For specific appliances, the appliance energy cost calculator does all three steps at once.