A typical American household might spend $100 this month on electricity. Over the course of the year, that bill will total $1200. Not only is our hard-earned money disappearing into thin air, but we are also destroying the environment in the process. That’s because to produce electricity, power plants must burn coal. Not only does this contribute to carbon emissions and smog, but forests are often destroyed in the coal mining process. The great tragedy, ultimately, is that saving electricity — and our money — is actually very simple. It only takes a few minutes to learn how to conserve electricity, but afterwards, you could save around a thousand dollars each year. That’s not a bad reward for helping to preserve the environment.
Many homeowners won’t bother with conservation simply because they don’t understand how electricity is being billed. Electricity isn’t tangible like gasoline is, so it’s difficult to figure out how electricity is measured, how much our devices use, and how all this is priced. As a result, it’s difficult to predict whether one electrical device is more wasteful than another. For example, most people know that a Hummer wastes more gasoline than a compact car, but few know whether a hair drier is more wasteful than a television. The mystery behind electricity pricing is what makes conservation difficult to practice, so before we start saving money, let’s first understand how electricity is billed.
Power, energy, and time are three related variables that follow this equation:
Energy = Power × Time
To better visualize these concepts, let’s use a rough analogy. Imagine we decide to build an old-fashioned water mill on a fast-flowing river to grind flour. The rate at which water flows influences how quickly the watermill works: the faster the river, the more flour we can grind. In a way, the rate of flow is similar to the power usage of a device: the more power your air conditioner uses, the more energy you will be charged for. Although we might measure water flow in units of feet per second, we measure electrical power in units of watts (W).
Power, however, is not what you are billed for (1). If a farmer rented a watermill to grind flour, he would probably be charged based on the amount of flour he grinds, not on the speed of the river. The amount of flour produced depends not only on the rate of water flow but also on the length of time spent milling. Likewise, our utility company doesn’t bill us for the power used but rather the total energy used. According to the equation above, the total energy is a product of power and time. Since the unit of power is in watts (W), and the unit of time is measured in hours (h), it would make sense to measure energy in units of watt•hours (W•h).
A single watt•hour, however, is a trivially small amount of energy. It’s the amount of energy that a one-watt device uses in one hour (1W × 1h = 1W•h), or what a two-watt device would use in half an hour (2W × 0.5h = 1W•h). For comparison, a single alkaline AAA battery contains around 1.15W•h (2). Measuring energy in watt•hours only makes sense for a tiny sliver of ultra-efficient devices, such LED flashlights. For the typical home appliance, however, it makes far more sense to price electrical energy in the much larger units of kilowatt•hours (1 kW•h = 1000W•h).
For our calculations, we’ll use the sample rate of $0.14/kW•h, which is the price of Tier 2 electricity from Southern California Edison as of June 2011 (3). (You’ll need to check your own electric bill to find out your exact rates.) Using this knowledge, let’s try to figure out how much it costs to operate some typical appliances:
How much does electricity cost to run my laptop? I use my 2007, 13″ Macbook for about 4 hours/day, 5 days/week. During normal operation (light web surfing), it uses around 25W of power (4). 25Watts × 1kW/1000W × 4 h/day × $0.14/kW•h = $0.014/day. That is, I would pay around one and a half pennies each day to power my laptop. To figure out the cost per month, we multiply by the number of days per week, then by the number of weeks per month: $0.014/day × 5days/week × 4.5weeks/month = $0.315/month, or about 32¢ each month. To calculate the cost per year, we multiply by the number of months per year: $0.315 × 12 months = $3.78/yr, or almost four dollars each year.
As you can see, laptops are actually cheap to power. In general, electronics designed to run on batteries are energy-efficient. (Just remember to turn them off or sleep them when not in use.) If you’re looking to save significant money, you’ll need to hunt around the house for big energy hogs. Let’s take a look at a more interesting example: central air conditioning.
How much does electricity cost to run the AC during the summer? Let’s say we live in sunny Arizona, so that the AC is blasting 12 hours a day, everyday for 6 months of the year. We’ll estimate the power use of a 2.5-ton central AC at around 3500W during operation (5). One detail to remember for ACs is that they don’t usually run continuously. Air conditioners only operate when the room temperature exceeds what is set on the thermostat; all other times, the AC is in sleep mode. With this in mind, let’s estimate that the AC is powered on around 33% of the time. With the AC turned on 12 hours each day, we estimate that it is actually operating for about 4 hours each day. 3500W × 1kW/1000W × 4h/day × $0.14/kW•h = $1.96/day. The cost of operating monthly is $1.96/day × 30.5days/month = $59.78/month. The cost of operating it each year is $59.78/month × 6months/year = $358.68.
With central AC, you would waste over $350 dollars each year. Part of the reason it’s so expensive is because central AC is cooling the entire house, when really all you need is to cool a single room. Air conditioning is also much more energy-intensive than using a fan.
How much money would you save by using a fan in place of the AC? On the medium setting, a box fan might use around 60W power (6). 60W × 1kW/1000W × 12hours/day × $0.14/kW•h = $0.1008/day. The cost of operating monthly is $0.1008/day × 30.5days/month = $3.0744/month. The cost of operating it each year is $3.0744/month × 6months/year = $36.8928/year. Compared to the central AC ($358), that’s a savings of $321, or nearly 90%!
As you can see, it pays to focus on the biggest energy-guzzlers first. Heating and cooling account for over 70% (7). The runners-up are probably lighting and refrigeration.
Monthly Cost = Power (in W) × 1kW / 1000W × h/day × Price (in $)/kW•h × days/month
Keep in mind five key tactics:
Small is beautiful. All other things equal, a smaller device uses less power than a larger one. Central heating wastes much more energy than a portable space heater, and a widescreen-TV uses much more electricity than a smartphone. Save money by using the smallest appliance possible.
Less is more. The less you use a device, the more money you save. Remember that saving electricity is not simply about lowering power consumption but also about lowering time used. Even Energy-Star appliances, if you leave them on all day, can waste money. So turn off devices when you’re not using them, paying special attention computers, monitors, televisions, lights, fans, air conditioners, and heaters.
Not too hot, not too cold. The higher the setting on a device, the more power it uses. Turn the power on your device to the lowest setting to save plenty of cash. You can lower the power settings on most devices, such as hair driers, fans, desk lamps, and even kitchen ovens. This will make a huge difference in your heating and cooling bill. In the summer, keep your AC’s thermostat set above 80F, and in the winter, set your heater’s thermostat to lower than 60F. You could easily save hundreds each year (see above calculation).
High-tech is nice. Check out compact fluorescent lightbulbs, energy-star appliances, better home insulation, front-loading washers, geothermal heating/cooling pumps, tankless water heaters, and top-opening refrigerators. Although these inventions all require an upfront cost, they will more than pay for themselves after a few years, if not a few months.
But low-tech is even better. You’ll save the most money when you ditch electrical devices altogether. For example, I don’t use an air conditioner, fan, TV, smartphone, drying machine, or treadmill. Low-tech does more than save money on electricity; it saves on the upfront costs of buying equipment in the first place. If you’re serious about going green, low-tech is usually lightest on the environment.
Just like with gasoline, electricity prices will surely increase in the future. But if you lower electricity consumption today, you might be able to power your home using only renewable energy. This can help you lock in the cost of electricity, saving you plenty of money and lowering your carbon impact. Conservation, as always, is the key to financial and environmental sustainability.
- Usually you will be billed for energy alone, but a few utility companies have a demand charge based on your peak power usage. To illustrate, suppose you had three appliances: a washing machine, a microwave, and a vacuum cleaner. If you ran all three appliances at once, you would have a much higher peak use of power compared to if you ran one appliance after the other. The demand charge is based on the maximum power used at any instant for a given day (or month).
- Some batteries and the amount of energy they store.
- See Southern California Edison’s website.
- Two different estimates on Macbook power usage. I just approximated.
- Estimate provided by Mr. Electricity.
- Power data for different fans from SaveGreenly.com.
- According to the EIA, space heating accounts for 41% of energy consumption while water heating and air conditioning account for another 20% and 8%, respectively.
- Photo credits: Brian Talbot, CC BY-NC. alessandraelle, CC BY-SA.