NOBODY REALLY UNDERSTANDS THEIR ELECTRICITY BILL
Energy, power, watts, watt-hours, kilowatts, kilowatt-hours.
It’s unsurprising that most of us don’t really understand our energy bills…So to start let’s think in terms of cars, petrol and road trips…..
A car needs petrol to move. Petrol has a price. How fast and how far you drive dictates how much petrol you use per road trip. So the petrol bill is simply the cost of petrol per litre multiplied by litres of petrol used.
A house needs electricity to run. Electricity has a price. How many electrical things you use, how much electricity each thing uses and how long each thing is on for dictates how much electricity you use per month.
Now let’s understand how electricity is measured and charged.
To do that we need to understand a few things. Watts, watt hours and unit cost. Power is the rate at which energy is either produced or consumed.
A watt is a unit of power. It is the amount of energy an item needs to function. Eg an air fryer requires 1500 watts of power.
A watt-hour is a unit of energy. It is the amount of energy an item consumes over a given timeframe. Eg an air fryer that is on for one hour uses 1500 watt hours. (1500 watts times 1 hour)
Because watts are really small…instead of using watt-hours electricity is instead measured in kWh which makes the maths far easier. (1 kWh is a power consumption of 1,000 watts for 1 hour)
This makes things simpler so the above air fryer only uses 1.5 kWh which is easier to remember than 1500 watt-hours.
It’s a bit like measuring a football field in metres as opposed to millimetres. Metres is just plain easier.
Your electricity supplier (power company) will charge you a unit cost per kilowatt-hour. They will take the amount of kWh you use in a month multiplied by the unit cost to give you your energy consumption costs for that month.
To keep the maths simple (and perhaps overestimate a little) the average household in the UK will use about 10 kWh of electrical energy each day. (A large HMO of say 8 beds would likely use as much as 30 kWh per day)
The average unit charge per kWh for electricity in the UK right now is 28 pence. So as a rule of thumb the average household will use £2.80 worth of electricity per day (10 x 0.28) which is about £85 a month.
However your monthly bill isn’t just the amount of energy you use. It also includes what’s called a standing charge which is a daily charge that you pay to the power company just to have access to energy. (electricity) The average electricity standard charge is 46p a day. So even if you didn’t turn on a single electrical device all month you would still be paying an electricity bill of around £15 a month.
So based on the above usage numbers and the average kWh prices you can see that an average household will be paying a bill of around £100 per month for electricity.
Now we understand how our electricity bills work it’s worth having a clear idea on what the most energy intensive household appliances are so that you can be more mindful. Portfolio owners that offer bills-inclusive rent such as (non student) HMO operators need to pay particular attention as there is very little incentive for tenants to use less energy if they aren’t bearing the costs. We have written more on HMO energy considerations here.
At a fundamental level it’s key to understand that using electricity as opposed to gas for heating things is usually the most intensive and expensive use of energy. So electric power showers which require 10,000 watts are hugely expensive to run. (Especially if you have a 10 bed HMO containing 10 en-suites!)
Other expensive items will be tumble driers (4000w) electric heaters (3000w) and gaming computers (600w) Below is a comprehensive register of household items and their energy consumptions:
www.daftlogic.comhttps://www.daftlogic.com/information-appliance-power-consumption.htm
It’s worth having an approximate framework for how much things cost to use and so here are a few that are easy to remember.
Based on a kWh charge of £0.28:
A tumble drier on a 45 minute cycle will cost £0.84 per use
An electric heater used for 3 hours per day will cost £2.50 per day
A gaming rig being used for 6 hours a day will cost £1 per day
An air fryer used for 30 minutes will cost £0.21 per use
You can see how properties with multiple occupants can be so energy intensive. A fairly typical HMO could easily have 8 residents each using all of the above each day. Thats £35 a day just for the above appliances not to mention any other electrical appliance use.
By understanding how energy is billed, measured and used at an appliance level we are able to better control our energy use by choosing the best supplier, being mindful of how we use appliances in our homes as well as thinking about what appliances we supply in rental units as developers, builders and shared living operators.
