How To Estimate And Lower Your Electricity Bills

What will a 27-65% decrease in your electricity bill do to your finances, and that of your family? Is it possible to estimate how much each of your electrical appliance adds to your monthly electric bill? What if you could probably use this information in making informed decisions on your electricity consumption in order to help reduce your monthly bills? What if you could identify some “flaws” in ECGs prepaid charging mechanism and usurp it to your advantage?

In this article, we will seek to create a simple mathematical expression to help us in estimating the cost of running electrical appliances in our homes, based on current electricity tariffs as announced by the Electricity Company of Ghana (ECG). With this expression, we will analyze multiple typical energy consumption scenarios we find in our homes. We will simulate how much we could save in electricity bills by replacing some of our electrical appliances, or changing the way we use them.

In addition, we will examine some of the most common practices that drive up our energy consumption and proffer some pragmatic solutions. Above all, we will review and critique ECG's electricity charging mechanism for prepaid customers and provide possible ways to use it in lowering our bills.

Overview of Current Electricity Tariffs
We have come to understand that the ECG bills us separate tariffs depending on the category/consumption bracket in which we find ourselves, or how much energy we use by the end of the month. Currently, if we use between (0-50) kiloWatt (kW) by the end of the month, we attract a ₵0.30/kW tariff. If we use between (51-300) kW per month, we attract a ₵0.63/kW tariff, whereas a 301-600kW per month attracts a ₵0.87/kW tariff. Those who use over 600kW by month's end pay ₵0.97/kW. In other words, the more energy we use, the higher the price we pay per kW.

Therefore, if we were to use a total of 100kW at the end of the month, we would fall within the (51-300) kW category, which would attract a ₵0.63/kW tariff, bringing our base monthly bill to ₵63 (100 x 0.63). If we had used a total of 50kW at the end of the month, we would have fallen into the (0-50) kW category, which would have attracted a lower ₵0.30/kW tariff, bringing our base monthly bill to ₵15 (0.30x50). From the above scenario, we realize that doubling our monthly energy consumption quadruples our monthly bills due to the switch in consumption bracket. In other words, cutting our energy consumption by half reduced our bill by 75%.

Simple Mathematical Expression to Estimate Appliance Monthly Bill

Most urban homes in Ghana supposedly use between (51-300) Kw energy per month. We will therefore narrow all our expressions and analysis to cover this category of residential users. We will provide separate expressions for other consumption categories and non-residential category of users at the end of this article.

At 30-day per month, 1kW to 1000 watts (W) conversion, a ₵0.63/kW tariff, and a 10% energy levy, the base monthly costs for running an appliance can be estimated using the following expression: ₵/month = 0.0209 x P x h

Where:
• P = Rated power of appliance in “Watts”. This information can be found on the data plate at the back or side of most electrical appliances with inscriptions like “65W”, “300W”, “120 Watts”.

If the appliance data plate shows only voltage and current in volts (V) and amps (A), multiplying the two will give us the Watts. Example, if the plate on the appliance says “output 19.5V and 2.31A”, the power is 45 Watts (19.5X2.31).

• h = Number of hours the appliance runs in a 24-hour day.

Note: Aside the base charge in the above derived expression, the ECG adds ₵6.33 monthly service charge and other little charges which are just a minute fraction of the base charge.

Estimating Individual Appliance Contribution to Our Monthly Bill

Let's run a few typical energy consumption scenarios using the above mathematical expression to see how much each appliance contributes to our monthly bill.

• A 24” 80 Watt LCD TV which is turned on 7 hours every day will cost us ₵11.7 in monthly bills (0.0209 x 80 x 7).

• An 1100 Watt electric iron which is used for an hour, once every 3 days will cost us ₵7.58 in monthly bills (0.0209 x 1100 x 0.33).

Note: Though we use this iron for an hour, we surely don't use it every day. Therefore, spreading the 1 hour across the 3 days gives an average 0.33 hour per day runtime.

• A 500 Watts rated refrigerator which is run 24 hours a day will cost us ₵167 in monthly bills (0.0209 x 500 x 16).

Note: Even though our fridge is switched on 24 hours a day, we used 16 hours in our estimation. This is basically due to the fact that fridges usually have a thermostat which turns them off when a set temperature is reached. If we estimate the thermostat turns the fridge off a total of 8 hours in a day, then the fridge will actually run for only 16 hours. Without a working thermostat, we would be paying ₵250 in monthly bills on this fridge alone.

• A 3,500 Watt central air-condition (AC) unit which is run 12 hours a day will contribute ₵731 to our monthly bills.

Note: ACs, just like fridges also have thermostats that switch them off when a set room temperature is reached. Here we estimated 10 hours actual run time. For instance, setting our AC at 26 degrees Celsius will automatically turn it off when our room temperature drops to 26 degrees. Without a properly working thermostat, we will actually run our AC for the entire 12 hours, contributing ₵877 per month to our monthly bill, instead of ₵731.

Estimating Our Total Monthly Bill
Our monthly electric bill is the sum total of the cost of running each appliance in our homes. Hence, our total expected monthly electricity bill can be estimated by simply summing up the energy cost or bill of each appliance we use in our home.

Let's assume we have the following items in our home:

• Two (2) 40” 120 Watt LCD TVs which is turned on 12 hours a day.
• One (1) 200 Watt fridge which is on 24 hours a day (16 hours actual runtime)  5 CFL bulbs rated at 18 Watts each which are on 12 hours (6pm to 6am) a day.
• A 100 Watts fan which runs 4 hours a day
• A 1.6 Horsepower 1,200 Watt well pump which runs 30 minutes (0.5 hours) a day.

Our monthly bill will therefore be the summation of all the monthly bills per each appliance, in addition to ECGS fixed monthly service charge of ₵6.33 and other little ancillary charges. Thus:

₵/month = 0.0209 x ((2 x 120 x 12) + (200 x 16) + (5 x 18 x 12) + (100 x 4) + (1,200 x 0.5)) + 6.33 = ₵176/month.

ECG Tariff Rate Mechanism for Prepaid Customers

As explained earlier, the ECG charges consumers different tariffs based on total monthly kW usage. For postpaid consumers, this is straightforward. However, for prepaid customers, it is challenging to figure out the criteria the ECG uses to place consumers in the appropriate category in order to determine which tariff to charge them.

How does the ECG determine how much power a prepaid customer will consume at the end of the month in order to charge him the respective rate? In other words, how is the ECG able to identify that a customer will use more than 50kW, 300kW or 600kW within a month in order to charge him ₵0.30/kW, ₵0.63/kW or ₵0.87/kW respectively?

When a customer buys prepaid credit and loads it unto his meter, his credits starts running immediately. The question remains; at what rate is he or she charged, especially when the ECG has no idea how many total kiloWatts or energy he will use by the end of the month?

Out of curiosity in finding out the method, or probably the complex algorithm used by the ECG to determine customers' consumption bracket, the ECG was called. I must commend the ECG for having arguably the best customer service amongst all state institutions and agencies in Ghana.

Deliberations with the ECG revealed that, the consumption bracket, and therefore the tariff charged to prepaid customers is based on the amount of prepaid credit they purchase. Therefore, if we buy ₵30 prepaid credit, we are placed in a 0-50kW category and assessed a ₵0.30/kW tariff. If we buy ₵200, we are placed in a 301-600 kW category and assessed a ₵0.63/kW tariff, whilst a ₵400 attracts a ₵0.87/kW tariff.

With that being the case, we can conclude that, the richer we appear to be, the more we pay for electricity, making it economically sound to buy prepaid credits in bits, than in bulk. So, if Andy uses between 0-50kW of energy a month, a ₵200 prepaid credit should last him over a year, at a ₵0.30/kW tariff. However, buying ₵200 prepaid credit in bulk will last him just 6 months because he's put in a higher consumption bracket of ₵0.63/kW, instead of ₵0.30/kW.

From the above analysis, buying prepaid electricity credits in bits can possibly save us between 27 - 65% in electricity bills.

Ways to Lower Our Electricity Bill
From the above analysis and calculations, it is quite obvious that, to lower our electricity bill, we either have to reduce the number of hours we run our appliances, and/or use appliances with lower power ratings. We will therefore discuss some ways to achieve this. Most of the measures presented below are already known to most of us, but the extent or quantum of savings we could realize from taking these measures are not very familiar to some of us.  Using Modern Electrical Appliances

Our antiquated, prehistoric “dinosaur” electrical appliances can contribute greatly to our total monthly electricity bill. The big bloated 60-inch CRT TV in our homes may not only be giving us a low quality viewing experience, but may be costing us extra cedis in electric bills which could pay off for a new modern type TV.

An 18 cu. ft. (cubic feet), 1990 refrigerator may use 1,200 kWh in a year, costing us ₵831 per year, while a modern 2010 refrigerator may use just 350 kWh in a year costing us ₵242. That's a ₵590 per year in savings which could pay off some of the cost in buying a new refrigerator.

Likewise, replacing a 75 Watt inefficient onion bulb with an 18 Watt CFL bulb could save us ₵128 per year assuming we turn it on 9 hours a day. From the above analysis, we realize that, though replacing our appliances with newer models comes with some initial cost, the long term energy savings makes it worthwhile.

• Reduce Appliance Runtime
Quite a considerable number of us are aware of the importance of turning off our appliances when they are not in use. The importance of a thermostat cannot be overemphasized as we have shown in our previous examples on fridges and ACs. Ensuring our thermostats are working properly as well as setting our appliances at higher set points will significantly lower the number of hours they run and in turn lower our energy consumption and bills.

Reducing the runtime of our 2000-Watt AC unit from 12 to 8 hours a day could save us ₵167 per month or ₵2,006 per year in energy cost. Likewise, turning on our five (5) 60 Watt bulbs from 7pm to 6am, instead of 6pm to 8am could save us ₵18.8 per month or ₵225 per year in electricity bills.

• Downsize Our Electrical Appliances

Our AC will make up about 60% of our total household energy consumption. Do we really need a 4,000 watt central AC unit for our home? What about the 23 cu. ft. refrigerator which is almost always empty? Going for smaller units could save us hundreds of cedis in electricity bills. Replacing our 22 cu. ft. 658 kwh per year fridge, which is barely half-full, with a smaller 15 cu. ft. 354kwh per year fridge could save us ₵17.5 a month or ₵210 a year in electricity bills.

We need to also note that, a central type AC cools all the rooms and spaces in our house, making it a wasteful appliance if we do not use all our rooms or our entire house at all times. Window unit ACs will cool just the rooms we use, thus eliminating wasted energy and reducing our bills. Replacing our central AC with a traditional window unit could save us hundreds to thousands of cedis in electricity bills.

Also, when buying ACs, it's important to buy the right size based on the area or size of our room. This will ensure we do not buy oversized AC which will cost us more on our bills. A 100 – 250 square foot room will require between 5000 – 6000 BTUs/hr capacity AC, whilst a 250 – 450 square foot room will require between 7000 to 10,000 BTUs/hr AC.

• Raise AC Thermostat Temperatures
Cooling our rooms to the point of discomfort is not only wasteful, but unhealthy. The fact that we have an AC does not mean our rooms should be visibly emitting cold vapors as if we were in Russia or Finland. Each degree above 22 degree Celsius saves us between 4-6% of AC power usage. Raising our AC thermostat temperature from 21 to 23 degrees will potentially reduce our AC power cost by 8 to 12%.

• Supplement AC With a Ceiling Fan
A ceiling fan will not cool our rooms, but will rather blow off the heat envelope our bodies generate, making us feel comfortable even at higher room temperatures. That's one reason why it's not smart to leave our fans on when we leave our rooms.

With a ceiling fan, our AC thermostat can be set at higher temperatures and still make us feel comfortable, saving us the energy cost for the extra lower degrees we would have run our AC without a fan. With the cost of running a fan magnitudes lower than that of running an AC, supplementing our AC with a fan could potentially save us 15% in AC energy costs.

 Reduce Standby Costs
Appliances that are not in use should be unplugged from the mains and not just switched off. Our electrical appliances still consume some energy when left in standby mode, or even switched off but plugged in. Though these losses per appliance may not be high, aggregating them over a year shows significant losses.

Keeping our computer monitor in sleep mode for 16 hours every day could cost us approximately ₵48 a year. Leaving the monitor display on will cost us five times the amount of putting it in sleep mode. Switching off our TV with our remote, instead of unplugging it, for 16 hours every day can consume up to 10 Watts, representing about ₵40 a year in standby losses.

Conclusion
It is worthwhile to estimate how much each appliance contributes to our monthly electricity bills. With this knowledge, we can make informed decisions on which appliances to keep, which ones to replace, how much we lose by using them for long hours, and how much we could save by using them for shorter hours.

Our formula/expression above was based on residential customers who use between 51-300 kW a month. Below are expressions for other category of users:

Residential
• 0-50 kW Baseline Consumers: ₵/month = 0.010 x P x h
• 301-600 kW Residential Consumers: ₵/month = 0.0288 x P x h
• 600+ kW Residential Consumers: ₵/month = 0.032 x P x h

Non-Residential (Business)
• (0-300) kW: ₵/month = 0.0319 x P x h
• (301 – 600) kW: ₵/month = 0.0339 x P x h
• 601+ : ₵/month = 0.0536 x P x h

Andy Selorm H. Sedjie, BSc., MSc., PMP.
Andy is a Process Engineer, Tutor and Consultant in the field of oil & gas downstream operations and power generation. He is an ardent proponent of alternative energy generation and climate change, and an active member of the Society of Petroleum Engineers.