Have you ever wondered why your electricity bill continues to increase every year and fluctuates from season to season?
The fact of the matter is that many variables influence how much you pay for electricity. This article explains which factors affect energy consumption in your home the most.
How do energy providers charge for electricity?
First, you have to understand how energy providers charge for electricity. As a homeowner, you are very familiar with your bottom-line expenses, but do you understand what everything in your electricity bill actually means? To begin, you have to know the difference between kilowatts and kilowatt-hours, which is how energy providers set electricity price rates.
A very useful analogy is the relationship between speed and distance. When you drive on the highway, the speed of your vehicle is changing constantly as you weave through traffic. As such, speed is measured in miles per hour at any given moment.
That said, the distance you travel at a specific rate of speed is a separate, yet very closely related, figure. For example, if your vehicle’s speed is 60 mph, you will travel a distance of 60 miles in one hour at a constant speed, but as you know, speed is always changing in the real world.
The difference between kilowatts and kilowatt-hours is similar. Think of a watt (W) as a basic unit to describe the “flow” of electrical power. A 100W light bulb requires more power than a smaller 40W light bulb. Thus, a 100W light bulb shines much brighter than a 40W light bulb but consumes more power.
A kilowatt-hour is the measure of how much power your home uses in one hour. As such, energy providers price electricity rates by kilowatt-hours. Likewise, energy providers attract more customers by offering lower prices per kilowatt-hour, which can also vary dynamically based on times of “peak usage” by the electricity grid as a whole.
Which factors affect your electricity bill the most?
Now that you have a basic understanding of how energy providers charge for electricity the next question is: Which factors affect the cost of electricity the most? The simple answer is that daily energy consumption is the biggest factor, but you have to take into account other factors too.
Depending on where you live in the U.S., your electricity bill may be much higher than average. Data from the U.S. Energy Information Administration (EIA) is critical to separating fact from fiction.
Based on the most recent EIA data, the average home in the U.S. consumed approximately 900 kwh per month in 2013. Based on pricing per kilowatt-hour, the average monthly electricity bill in 2013 was approximately $111 nationally.
If you think that these numbers seem a bit conservative, you’re not alone. If you live in Texas, you’ll have to pay a much higher electricity bill during summer because your air conditioning unit is constantly cooling your home, yet the average cost of electricity in Texas was $133 per month in 2013. In the real world, many homeowners pay hundreds of dollars per month for electricity during summer.
Average prices per kilowatt-hour further muddle the picture. Nationally, the average price of electricity in 2013 was about 12 cents per kilowatt-hour. If you lived in Hawaii, however, you would have paid nearly 37 cents per kilowatt-hour, three times the national average!
The next question you may have is: Does the number of residents in a home affect the cost of electricity too? The short answer is yes, but depending on how much energy you consume monthly, your family may actually pay less for electricity even though you have a large family.
If you live with your spouse in a modest home in California with various appliances consuming power, you may have a large monthly electricity bill since the price of electricity is higher. But if you own a similar home in Washington and have a large family, you may actually pay less for electricity even though you’re family is consuming more power.
That said, the biggest factors affecting your monthly electricity bill are average power consumption in kilowatt-hours and average price per kilowatt-hour.
Where does solar power fit into the equation?
If your home consumes a high amount of electricity and you live in a region of the U.S. with a higher price per kilowatt-hour, solar power can save you money over time if you install the right system. It takes an expert installer to help you decide which solar energy system is best for your needs because there are so many variables to consider, such as the number of residents in your home.
Technically speaking, the number of residents in your home doesn’t affect the amount of solar power you can generate. The number of residents in your home affects solar energy consumption, not solar power generation.
In short, total power consumption and price rates are the most important factors you need to keep in mind when choosing the best solar energy system for your home. All things considered, you likely will discover that solar power is a sound investment.
RGS Energy has almost 40 years of experience in installing solar energy systems throughout the country, in a wide variety of settings. To find out how solar energy could power your home, visit www.rgsenergy.com.