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How Much Does Electricity Usage Cost?

Winter is approaching which means the refreshing crispness in the air will lead to higher heating costs.   For the most part, modern houses built in Newfoundland use electricity for heat, whereas places like Toronto, use natural gas.  Even if you don’t use electric based heat, you likely use electricity for your washer/dryer, dishwasher, refrigerator, stove and the power hungry hot water heater.  But how much does it really cost you?

The first step is to figure out how much your local electric utility is charging you for electricity.  In NL, the current local rate is around $0.12/KWh.  You can find the rate in your area by visiting the utility website, or simply looking at your most recent electricity bill.

But what is KWh?  It’s a measure of power consumption and is basically two units of measure; power (kilowatts or 1000 * watts) and hours.  In other words, KiloWatt-hours (KWh) indicates the power you have used for a specified period of time.

In case you wanted to know, Power = voltage * current (measured in Watts or W).

Typical Household Power Hogs

The Dryer

A typical dryer uses around 5500W of power, or 5.5KW.  If you use the dryer for 1 hour to dry a load of clothes, then you are using 5.5KW * 1hr = 5.5KWh.  Say that your utility charges $0.12/KWh, then multiply your power consumption by the price the utility charges.  In this case, it would be 5.5KWh * $0.12/KWh =  $0.66.  For NLers, every time you dry a load of clothes in an electric dryer, it will cost you around $0.66.  Say that you do 15 loads in a month, this works out to be around $10/month added to your electricity bill.  Frugal Tip:  Make sure that lint trap is clean and use a clothes line when weather permits!

Lights

Using CFL bulbs are popular these days due to the decreased energy usage and increased life of the CFL bulb.  We use them where possible at our house which leads to some savings.  Incredibly, a 60W incandescent light bulb (traditional bulb) can be replaced with a 13W CFL bulb and have approximately the same light impact on a room.  A 60W bulb used 5 hrs a day (0.060KW * 5 hrs = 0.30 KWh) would cost around $0.04/day to use.  Not a big deal, but multiply that by 30 or so bulbs in a house, and it works out to be about $30/month.  Replacing the incandescent with CFLs would result in paying $7/month instead.  The higher initial cost of CFLs will quickly pay for themselves over the years.  Frugal Tip:  Use CFLs but wait for them to go on sale!

Hot Water

An electric hot water heater also requires a lot of energy to keep running.  Every time hot water is needed, like for a shower, dishwasher or clothes washer, hot water is pulled from the water tank but gets refilled with cold water.  The drop in tank temperature results in the heating elements turning on until the water temperature reaches the programmed set point.  There are a few variables in determining energy usage of a hot water tank, but lets assume an average 5500W tank and 3 hours of water usage a day.  Using the trusty formula above and assuming $0.12 KWh, results in a cost of about $2 per day or $60 per month.  While this cost can go higher with larger families, the good news is that there are some tricks of the trade to reduce hot water usage.  Frugal Tips: Use low-flow shower heads, try the “quick” setting on your dishwasher rather than the “normal” setting, and wash your clothes in cold water instead of hot.

Electric Baseboard Heaters

While dryers and water heaters are power hogs, the kings of power consumption are electric baseboard heaters, especially in areas with colder climates.  It is estimated that for every foot of baseboard heater equates to 225W of power consumption.  So a 10×10 room with a 4.5ft baseboard heater will use approximately 1KW of power.  In the winter, heating a modest 1000 sq ft living space could cost $180 (assuming 5 hours per day of heating) or more depending on how warm you like your space and how well insulated your home is.  Frugal Tips:  Use programmable thermostats to automatically turn down the heat when you are at work and when you are sleeping.

TV

A lot of people turn on the TV and leave it on as back ground noise.  With LCD and LED technology, power consumption on even the larger screens aren’t too onerous.  A newer 50″ LCD TV typically uses 150W, which if used 5 hours every day would only run you about $2.70/month.

Refrigerator

Another appliance that doesn’t use as much energy as you might think is your refrigerator.  According to Fortis, a modern 18 cu ft refrigerator will use about 56 KWh/month or about $6.72/month (based on $0.12 KWh), even less if you have one that is Energy Star compliant.

Final Thoughts

To calculate how much power an appliance is consuming in your house you need to determine the KWh of that device.  To get this:

  1. Find out the power rating of your device (Watts or W);
  2. Divide by 1000 (to give you KW);
  3. Then multiply by the number of hours that you use the device (to give you KWh).
  4. Once you determine the KWh, multiply by the rate that your utility charges per KWh.

You will notice that most of your energy is used by a couple of  items namely electric baseboard heat and the hot water boiler.  In colder climates, electric heat can make up 60% of your utility bill.  For us, we have put a lot of effort into reducing our heat bill, here’s more on how we save energy around the house.

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Stock Market Momentum, Market Volatility, Investing with Conscience, Emotional Side of Retirement and more!

Reminder, this free promo will expire at the end of this month! For a limited time, Market Club is offering a free 2-week trial on their stock trading tools (reg $8.95/trial then $59/month). What makes it even better is that no payment information is required, so no need to cancel your payment after the free trial. More info here.

Ever think of stock market movements as an airplane in motion? Michael James on Money has a few words for you through Stock Market Momentum.

Charitable contributions have more than just the emotional benefits. Learn how to Make the Most of Your Money: Investing Your Charitable Donations Credit at Canadian Finance Blog.

Are you not part of the early retirement saving crowd? Boomer and Echo can help you: Retirement Planning For Late Starters.

Scared that the stock market is going south? The Retire Happy blog tells you What to do when the Markets Are Falling?

The Canadian Personal Finance Blog narrates an experience about Reversing Mutual Fund Purchases.

In a world where investments are made to seek profits at all costs, hopefully in a legal manner, Sustainable Personal Finance asks: Do You Ever Invest With Your Conscience?.

Canadian Dream highlights that learning and acting/applying are two different things through the post: Using the Information.

Wondering if you should accelerate your mortgage payments? Young and Thrifty offers 4 Reasons Why You Might Not Want to Pay Down Your Mortgage ASAP.

Typically, many blogs underscore the financial side of retirement; The Blunt Bean Counter shows you The Emotional Side of Retirement for Entrepreneurs.

If you have messed up your credit history, then you would find Financial Highway’s 5 Tips for Improving Your Credit After Making a Big Mistake useful.

My Own Advisor gets the chance to catch up with Derek Foster, Canada’s Youngest Retiree, in a recent interview.

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