How to Calculate Electricity Bill and Save Energy Cost
If you’ve ever looked at your electricity bill and wondered “How on earth did it get this high?” — you’re not alone. With energy prices constantly shifting and so many devices plugged in at home, it’s easy to lose track of what you’re actually using (and paying for). But the good news is, once you know how to calculate electricity bill, everything starts to make a lot more sense.
In this guide, you’ll learn how to figure out electric bill, how to track your usage in kilowatt-hours (kWh), and what really drives your monthly costs. You’ll also pick up some practical tips to help bring that number down — so make sure you read till the end.
How Electricity Bill Is Calculated
Figuring out how to calculate power bill in the UK can feel like deciphering a complex code at first, but it boils down to a few key components. The final amount you pay is largely determined by your energy consumption, but there are other charges that contribute to the total.
Here’s a breakdown of how to calculate electricity cost:
1. Your Energy Usage (in kWh)
Electricity usage is measured in kilowatt-hours (kWh). One kilowatt-hour is the amount of energy used by a 1,000-watt appliance running for one hour.
Your electricity meter tracks this usage, and your supplier uses that number to calculate your bill. If you have a smart meter, this data is sent automatically; otherwise, you’ll need to submit regular meter readings or get estimated bills.
2. The Unit Rate (per kWh)
This is the amount you’re charged per kWh of electricity you use. Your unit rate might be fixed for the duration of your contract, or it could fluctuate with the energy market if you’re on a variable tariff.
Between April and June 2025, the average unit rate for standard tariff customers paying by Direct Debit was around 27.03p per kWh.
3. The Standing Charge
This is a fixed amount you pay every day on top of your unit usage, whether you use a little electricity or a lot — even if you don’t use any at all. It’s like a fee to stay connected to the electricity grid, and it covers the cost of maintaining the network (the wires, cables, and infrastructure) and keeping your meter running smoothly. It also ensures your home is always connected to the national grid.
This charge is regulated by Ofgem, the UK’s energy regulator, as part of the energy price cap. Between April and June 2025, the average standing charge for customers on a standard plan paying by Direct Debit was around 53.80p per day — which adds up to about £16.14 over a 30-day month.
4. VAT
Finally, there’s VAT (Value Added Tax), which is a tax added to the total cost of your electricity — including both the standing charge and your unit usage. The domestic VAT rate for electricity in the UK is currently 5%, and this applies across all suppliers and tariffs.
Putting It All Together
To calculate electricity cost, your supplier uses this simple formula:
Your Final Bill = (kWh Used × Unit Rate) + Standing Charge + 5% VAT For example:
You use 300 kWh in a month
Unit rate = 27.03p → 300 × £0.2703 = £81.09
Standing charge = 30 days × £0.538 = £16.14
Subtotal = £97.23
VAT (5%) = £4.86
Total Bill = £102.09
Your actual rates and charges might differ depending on your tariff, supplier, and region, but this electrical billing breakdown gives you a good idea of where your money goes.
How to Calculate Your Electricity Usage in kWh?
As we’ve seen, the first step on how to compute electric bill is to figure out how much electricity you’ve used in kWh for a certain period.
Check Your Meter (or Smart Meter)
Of course, the easiest way to find out your electricity usage is to read your meter. You can do this manually or through a smart meter if you have one. Here’s how:
Take your current reading (look at the kWh number on your meter or in your smart meter app)
Subtract your last reading (from your previous bill or a reading you noted down earlier) This gives you the number of kilowatt-hours (kWh) you’ve used in that period.
Example:
Previous reading: 15,230
Current reading: 15,480
Your usage = 250 kWh
Smart meters make this even easier — you can usually track your usage daily, weekly, or monthly through the in-home display or your supplier’s app.
Want to Understand Where Your Usage Comes From?
If you want to dive deeper and see how your electricity is being used around the house, you can calculate kWh usage appliance by appliance. It’s a great way to spot the biggest energy users.
Use this simple formula: Power (in kW) × Time (in hours) = Electricity used (in kWh)
You can find the power rating (in watts or kilowatts) on the appliance label, in the manual, or online. Just divide watts by 1,000 to get kilowatts.
Example:
A 2kW kettle used for 15 minutes (0.25 hours) → 2 × 0.25 = 0.5 kWh
A 1.5kW washing machine used for 1 hour → 1.5 × 1 = 1.5 kWh
A 0.1kW TV used for 4 hours → 0.1 × 4 = 0.4 kWh
A 0.06kW light bulb on for 5 hours → 0.06 × 5 = 0.3 kWh
Total for the day: 2.7 kWh
To estimate electricity bill:
If your unit rate is 27.03p per kWh, that day’s electricity would cost about £0.73.
What Factors Influence Your Monthly Electricity Bill?
Sometimes we check electricity bill and wonder, ‘Why is it so high? I haven’t even used that much!’ That’s because there are quite a few factors that affect how much you pay each month, beyond just how often you flick the kettle on.
How Much Electricity You Use
This one’s the most obvious: the more kWh you use, the more you’ll be charged. Heating, cooking, washing, and entertainment systems all add up — especially if they’re used often or for long periods. Energy-hungry appliances like electric heaters, tumble dryers, and older fridges can drive up your usage without you realising.
Your Unit Rate and Tariff Type
The unit rate (what you pay per kWh) depends on the tariff you’re on. Some people are on fixed-rate tariffs, where the unit cost stays the same for a set period. Others are on variable tariffs, where prices can go up or down based on market conditions.
You may also be on a time-of-use tariff like Economy 7, where electricity is cheaper during off-peak hours — but only if you shift your usage to those times.
The Size and Type of Your Home
The size and type of your home can have a big impact on how much energy you use. Bigger homes—and more people living in them—usually mean more energy is needed for things like heating and lighting. For instance, a spacious five-bedroom detached house could use around two and a half times more energy for heating than a smaller two-bedroom flat, assuming both have similar insulation and heating habits.
Home Energy Efficiency
Homes with better insulation, double-glazed windows, and energy-efficient appliances use less electricity. A fridge from 2005 might cost double to run compared to a newer A-rated one. The same goes for things like dishwashers, washing machines, and electric heaters.
Seasonal Changes
Your electricity use tends to go up in the winter — with heaters, tumble dryers, and lighting used more often. In summer, your bill may drop if you’re relying more on natural daylight and don’t need to heat your home.
How You Pay Your Bill
Believe it or not, your payment method can affect how much you pay. Most suppliers offer a cheaper rate if you pay by Direct Debit. If you’re on a prepayment meter or pay on receipt of the bill, your unit rate may be slightly higher.
Market Prices and Regulations
Fluctuations in wholesale energy prices and regulatory changes, such as adjustments to the energy price cap set by Ofgem, can impact your bill. For instance, recent increases in the energy price cap have led to higher average household bills.
How Can You Reduce Your Electricity Bill?
Want to keep your electricity bill in check? In fact, small, consistent changes to how and when you use energy can make a big difference over time. Here are some smart and practical ways to save on electricity bills.
Switch Off Standby Devices
It sounds basic, but turning appliances off at the wall — instead of leaving them on standby — can save you around £30 a year. TVs, gaming consoles, and even microwaves use electricity in standby mode. A smart plug can help with this, allowing you to cut power to several devices at once.
Upgrade to Energy-Efficient Appliances
When it’s time to replace an appliance, look for ones with a good energy efficiency rating (A or B under the new UK scale). Energy-efficient models may cost a bit more upfront but use significantly less electricity in the long run.
Use Your Appliances More Efficiently
Wash clothes at 30°C and always try to run full loads
Air-dry clothes when possible instead of using a tumble dryer
Only boil the water you need in the kettle
Use lids on saucepans to cook food faster and save energy
Be Smart with Lighting
Switching to LED light bulbs is one of the quickest ways to cut electricity use. LEDs use up to 80% less electricity and last far longer than traditional bulbs. Also, remember to turn off lights when you leave the room.
Monitor Your Usage with a Smart Meter
Smart meters show you exactly how much electricity you’re using in real time — and how much it’s costing. This makes it easier to spot waste and make changes on the spot.
Compare Tariffs and Switch if Needed
You might be able to save money simply by switching to a better deal. Use a trusted comparison site or speak directly with suppliers to check if a fixed-rate or time-of-use tariff (like Economy 7) could lower your costs, especially if you use more energy at night.
Improve Your Home’s Insulation
While this involves a bit more investment, improving your home insulation helps reduce the need for electric heating. Even something as simple as using draught excluders or thermal curtains can help your home retain warmth more efficiently.
Consider Solar Energy to Power Your Home Naturally
Installing solar panels is a brilliant way to reduce your reliance on the grid. You can power your home directly from the sun and even store excess energy for later. Over time, this can drastically cut your electricity bill and increase your energy independence.
If you’re looking for an easy, flexible solar setup, consider a portable solar generator like the EcoFlow DELTA Pro 3 paired with EcoFlow solar panels.
The EcoFlow DELTA Pro 3 Portable Power Station is a next-level home energy solution. It offers:
4000W output – enough to run high-demand appliances like central AC, washing machines, and even water pumps.
4kWh base capacity – expandable up to 12kWh, so you can power your home for several hours during peak rates or outages.
Ultra-quiet operation at just 30 dB under typical loads.
Simple plug-and-play setup – no electrician required.
Weather-resistant and built to last – thanks to an IP65-rated design with durable LFP battery cells offering 4000 cycles to 80%, that’s up to 11 years of daily use.
Pair it with EcoFlow solar panels (up to 2600W solar input!) for clean, renewable charging. For example, with just two 400W panels (800W total), if we calculate solar panel output, you can generate around 2–4kWh per day — perfect for topping up the battery during daylight and using that power in the evening when electricity costs more.
Manage everything through the EcoFlow App, and take it anywhere thanks to the compact design, ergonomic handle, and sturdy wheels.
Conclusion
Figuring out how to calculate electricity bill might seem like a hassle at first, but once you understand the basics, it’s a powerful tool to have. You’ll know where your energy’s going, what’s making your bill go up, and what changes you can make to start saving. From switching off standby devices and upgrading to energy-efficient appliances to investing in solar power solutions like EcoFlow’s solar generators, a strategic move can go a long way toward lowering your bill. Start taking action today!
FAQs
How much is electricity in the UK?
As of April to June 2025, the average electricity price for households on a standard tariff paying by Direct Debit is 27.03 pence per kilowatt-hour (kWh). There’s also a standing charge of around 53.80 pence per day, which you pay regardless of how much electricity you use. Prices can vary depending on your energy supplier, tariff, region, and how you pay your bill.
How to calculate electricity bills from meter reading in the UK?
If you’re wondering how to work out electricity bill, subtract your previous meter reading from your current one to find how many kilowatt-hours (kWh) you’ve used. Multiply that by your unit rate (e.g. 27.03p per kWh). Then, add the standing charge (e.g. 53.80p per day × number of days) and 5% VAT. This gives you an estimate of what you owe based on your actual electricity usage.
What is the standing charge in the UK?
The standing charge is a fixed daily fee you pay to stay connected to the electricity network, covering costs like maintenance and meter readings. As of April to June 2025, the average standing charge for electricity is around 53.80 pence per day for households on a standard tariff paid by Direct Debit. You pay this charge regardless of how much electricity you use.