The electricity cost formula
Utilities bill by the kilowatt-hour (kWh). To find a device's cost, convert its watts to kilowatts, multiply by hours of use to get energy, then multiply by your rate:
kWh per day = ( watts ÷ 1000 ) × hours/day
daily cost = kWh per day × price per kWh
period cost = daily cost × days
Watts measure power; multiplying by time gives energy in kWh, which is what you actually pay for.
Worked example
A 1,000-watt space heater run 5 hours a day at $0.15/kWh, over 30 days:
kWh/day: (1000 ÷ 1000) × 5 = 5 kWh.
Daily cost: 5 × $0.15 = $0.75.
30-day cost: $0.75 × 30 = $22.50.
Yearly (365 days): $0.75 × 365 = $273.75.
Tip: a device's nameplate or a plug-in energy meter gives its real watts. Many appliances draw far less than their maximum rating in normal use, so a meter reading beats the label.
Finding your rate
Your price per kWh is on your electricity bill, often as a "supply" or "energy" charge plus delivery fees. US residential rates commonly fall around 15–17 cents per kWh but vary widely by state and provider. Use your actual all-in rate (including delivery) for the truest cost.