Energy Efficiency

Electricity 101: How to Understand Your Electrical Bill

Woman paying utility bills

Understanding your electrical bill can be confusing, especially when you factor in all of the information thrown at you. But it doesn’t have to be. Unfamiliar terms, hidden fees, and sneaky contracts can all add up to one thing: frustration. Luckily, once you know what you’re looking for and how to spot scams, it’s not that difficult.

This article discusses everything from how your electrical bill is calculated to charges that are hidden from view. Keep reading to learn more about what goes into preparing your monthly bill, as well as the ways that you can save money by looking out for hidden fees and contract details.

What Is An Electrical Bill?

When you’re looking at your monthly electric bill, it’s important to be aware of how they calculate your usage. Your connection charges are based on the amount of energy you use per month. So if you only use 200 watts, that comes out to $2 a month. However, if you use 2,000 watts or 2 kiloWatts, your electrical bill would be $4 a month.

Knowing how much electricity you used is one way to determine what your bill will be for the month. However, another thing to consider is whether or not your last billing cycle’s rates were higher or lower than the year before. Your current bill will have an estimate of what your costs could potentially be in the future based on this information–the more expensive it is now, the more expensive it will likely be next time around.

How Much Does An Electrical Bill Cost?

The cost of your electrical bill is calculated based on how much energy you use. This includes kilowatt hours, which is the amount of energy used per hour. If you’re using about 1,000-1,200 kWh per month, then your bill would be around $100-120 per month.

That said, not all companies charge the same rate for electricity. Some companies with a higher electric usage may face a higher monthly bill (or an extra fee) than others that use less electric power.

Understanding Your Bill Type and Frequency

Your electricity is billed in kilowatt-hours (kWh), which is the amount of energy used by your home in one hour. This is the unit used to calculate how much you’re being charged for your electricity. It’s calculated by multiplying the number of hours in a month by 1,000 and then dividing it by 1,000,000. A kWh is equivalent to 3.6 pounds of water or 33,000 Btu

The frequency at which you will be billed runs on a cycle known as “billing cycles” or “account cycles”. When you start your account with an electric company, they will establish your billing cycle and the intervals at which you will be charged for electricity. Your billing cycle will typically last anywhere from four to twelve months and each interval lasts two weeks

An account cycle consists of two billing periods known as “sessions” and these are separated by a pre-payment period.

The pre-payment period allows you to plan ahead for upcoming expenses and saves money on interest charges

Common Types of Electricity Bills

The most common types of electricity bills are the monthly bill and the quarterly bill. Your monthly bill is split into two parts: the electric portion and the delivery portion. The electric portion is payable every month, while the delivery charge is only paid once a year in November. If you have a meter that runs on direct current (DC), then your bills will be a little different, with more expenses being recorded for ‘electric service.’

If you have an electrical meter that runs on alternating current (AC), then there are three categories of electricity bills: standard, fixed-rate supplies, and time-of-day rates for each month. This makes it easier to spot what type of fee is being charged at what time during the billing cycle.

Tips for Reducing Your Electricity Bill

Some of the easiest ways to reduce your electrical bill are by turning off unnecessary lights and appliances, reducing the amount of time that you’re using your television, and switching to energy-efficient appliances. Other easy ways to save money on your electricity bill is by unplugging chargers from electronics when they aren’t being used, replacing incandescent bulbs with CFLs or LEDs, and taking shorter showers.

There are also some hidden fees that can be easily missed if you don’t know what to look for. If the power goes out in your home during a storm or if you have a broken utility pole, there might be a fee associated with those instances that needs to be paid before power is restored. You will want to check your contract for any hidden fees or contracts before agreeing to anything.

Safety First! Understanding the Parts of an Electrical Wire and Device

First and foremost, you should be aware of the dangers that come with electricity. Electricity can give you a shock, burn you, or even kill you. Always be careful when working with electricity and never assume that it’s the same as water.

Electrical circuits and devices have their own set of rules and procedures. Make sure to know what they are so that you can conduct your electrical work in a safe manner.

There are several components to an electrical wire or device that affect how it works. Once you’ve identified these parts and their functions, it will make understanding your bill a little easier.

Finding The Hidden Fees In An Electrical Bill

Hidden fees are often what make your bill so confusing. These can include things like administrative fees, taxes, and penalties and are often charged when you’re not aware of them. It’s important to keep a close eye on your account so that you know exactly what you’re paying for.

When it comes to hidden fees, it is usually best to contact the company in question in order to get an answer. That way, if there is a fee that isn’t listed on your bill, it can be removed from your next bill or payment.

Save Money On Your Electricity Bill By Installing Solar Panels

Electricity bills are confusing and can often be hard to understand. So instead of trying to make sense of it, why not just get rid of it? When you switch to solar power you can eliminate your energy bill entirely. Between modern advances in solar panel technology and solar panel batteries becoming more affordable, if you live in a sunny state, there’s no reason why you couldn’t power your entire home with solar panels year-round.

If you’d like to get a no-obligation solar panel quote from an installer in your area, we can help. We work with a nationwide network of top-rated, pre-vetted solar panel installers that are ready to compete for your business. Don’t waste your time chasing down installers for quotes and appointments – have them come to you with Solving Solar.