Energy Audit-Calculating Electricity Costs

Over the past dozen years of performing energy audit and assessments, I have learned there are three root causes that warrant an audit; there is a problem with the home, a problem with the equipment or appliances in the home, or a problem with the people living in the home.  Often these problems require testing of the homes electrical system and equipment to determine usage and the associated costs.  In this post, I will be going over a few different methods to determine how much cost is associated with electricity using equipment.

Let’s start with some basic electrical definitions.

Voltage – According to Wikipedia, voltage is the difference in electrical potential energy between two points per unit electric charge.  Simply, it is a pressure that pushes charged electrons through an electrical wire or circuit, much like water pressure in a plumbing system.  Almost all voltage in residential construction in the United States will be 120/240 volts.  Often represented by the letter E for electromotive force.

Amperage – This is the strength of an electrical current, often referred as an amp.  Amperage would be water flow as gallons per minute in our plumbing analogy.  Over current devices such as breakers or fuses and wire sizing are all based on the amperage of a circuit.  100 to 200-amp main electrical service panels are common sizes in residential construction and 15 or 20-amp branch circuits are common for lighting and plug loads.  Current is represented by the letter I.

Wattage – Wattage is defined as the rate of doing work and is represented by the letter P.  It’s a measurement of usage, much like tracking water use by using a water meter.  Wattage is the measurement of how electricity is billed and is the most useful electrical information to an energy auditor.  Electricity is billed at a kilowatt hour (kWh), or 1000 watts used in an hour.

Resistance – According to Wikipedia, electrical resistance is a measure of the difficulty to pass an electrical current through a conductor.  The concept is similar to friction and is measured in ohms.  In plumbing, this would be like pushing water through a pipe, the smaller the pipe, the harder to push the water through.  Resistance can be beneficial in a piece of electrical equipment, such as in electric resistance heating, but it can also be bad, for instance when too many amps are running through a wire that is too small for the load, this resistance can cause the wire to fail possibly resulting damage to equipment or a fire.  Resistance isn’t a very common measurement I use in an energy audit, but occasionally it is needed in calculating the cost of power.  Resistance is represented by the letter R.

Now that we have some basic terminology for electricity, let’s look at one of formulas needed to calculate the cost of power, called Ohm’s Law.  There is a direct relationship between the voltage, current, wattage and resistance in every electrical circuit.  These relationships are Ohm’s Law and can be shown in the following formulas.

                                  E÷I=R                   E÷R=I                   IxR=E                                                                           P÷I=E                   P÷E=I                   IxE=P

Because I am almost always solving for “P” or the wattage used by a piece of equipment, the Ohms Law formula I use most is current (I) x voltage (E) = wattage (P).

To determine how much a piece of equipment costs to operate, we will need to use another formula.  Electricity is billed in kilowatt hours or 1,000-watt hour increments.  Let’s use an electric space heater that consumes 1,000 watts or 1 kilowatt as an example.  1 kilowatt hour (kWh) times the cost of electricity in your area, for this simple example, we will make the cost of electricity $.10 per kWh, times the time the device is in operation will equal the cost of operation.  1 kWh x price of electricity x the time of operation = cost.  Assuming the electric space heater runs for 25 hours, the formula to calculate the cost is 1kWh x $.10 x 25 hours = $2.50.

Now that we know a few formulas, here is a real-world example.  One way to determine how much an appliance or piece of equipment costs to operate is by its nametag.  Every modern electrical device will have a nametag listing the voltage the equipment is designed to operate at, and either it’s amperage or wattage.  These tags are on both cord and plug devices along with fixed equipment such as water heaters and air conditioners, you just need to know where to look.  This tag is from a boot dryer I own.

This particular device uses 55 watts of power. Because the power consumption is already listed as wattage, the calculation to determine the cost of operation is simplified.   We needed to convert the 55 watts to kilowatts: 55w÷1000=.055 kW.  Using an electricity cost rate of $.10, this boot dryer will cost $.0055 per hour as long as the voltage is 120 Volts.  The formula is: .055 kWh x 1 hour x $.10 = $.0055 per hour or a little more than half a penny per hour.  Notice how I said as long as the Voltage is 120 Volts, Voltage can have an effect on cost, we will get to that in a little bit.

What if we don’t have a nameplate showing information on a piece of equipment?  We then test.  There are a couple different ways to test, the first is with a plug-in watt meter.  The one I use is called a Kill-A-Watt Meter.  You can test almost any appliance that has a standard 120-volt plug.  These meters will display the voltage at the electrical receptacle along with both the current being drawn and the wattage.  Some models can be programmed with electricity rates in your area and can record usage over a period of time. This information can then automatically calculate the costs associated with the appliance.  The device being tested in the photo was found to be drawing 7.05 amps and the voltage was 120 volts.  Knowing this information, we can calculate the wattage using Ohms Law.  Voltage x amperage = wattage.  In this case, the appliance was using 846 watts.  The device was a toaster.

An alternative way to test should only be conducted by someone trained in working with electricity.  This method requires working in an electrical box or service panel that is “live” meaning the power is turned on.  There is a risk of electrocution!   By using a clamp-on ammeter set to measure current, the power consumption of a circuit can be tested.  I often use this method when testing devices that do not contain a cord and plug connection, such as a well pump or furnace.  It may also be beneficial to test the usage of an entire service panel.  Clamping over each of the main power cables entering the service panel and adding the two together will show the usage of the entire panel at the time of the test.  Again, this type of testing should only be conducted by someone trained in working with electricity.

I mentioned earlier that the electricity cost can be affected by the voltage supplied to a home.  This voltage “setting” is provided by the electricity supplier and is set at the transformer outside the home.  Each phase or service conductor is typically set at 120 volts, but I have seen some transformers set in excess of 130 volts.  How can the voltage affect the cost to operate a piece of equipment?  To figure this out, we’ll go back and use a slightly different version of Ohm’s Law from the diagram shown earlier.  P=E²÷R, we are getting into the weeds a little with Ohm’s Law.  This time, we do need to solve for R or the resistance in the appliance.  Again, using a 1000-watt space heater, which draws 8.33 Amps at a listed voltage of 120Volt, we will solve for R using the formula R=E÷I.  120 volts ÷ 8.33 amps = 14.4 Ohms or resistance.  The resistance of the space heater is a constant.  Now solve for P, 120² volts ÷ 14.4 Ohms = 1000 watts.  Now increase the voltage to 130, and the formula is 130² volts ÷ 14.4 Ohms = 1174 watts, an increase from $.10 per hour to $.1174 per hour.  If this space heater were to run continuously, the increased cost would be $12.53 per month, just by an increase of 10 volts.

Testing electrical equipment for usage and cost can be intimidating and I don’t recommend messing around inside live electrical panels and devices unless you’ve had training.  There are some good tools and products on the market to help monitor usage.  Smart circuit breakers are available from Leviton and I’m sure other manufacturers soon that track electrical usage through the breaker.  There are also monitoring products that can be installed on individual circuits or the main power cables that enter the home.  Both may need to be installed by an electrician.  Another alternative is through an electricity supplier, many are utilizing smart meters which have technology to record whole house usage.  Some utility meters can supply the information either daily or hourly, some meters can even track to the minute.

To many, electricity is a mystery, but calculating what a device costs to operate is just math and finding information about the device in question.  But take it from an old electrician who has been “tickled” more than once by electricity, play it safe!

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