Before we see how much electricity costs, we have to understand how it’s measured. When you buy gas they charge you by the gallon. When you buy electricity you are charged the kilowatt-hour (kWh). When you use 1000 watts for 1 hour, that’s a kilowatt-hour. To change watts to kilowatts, divide wattage by 1000. An electric meter measures both the kilowatts and the time in hours the electricity is being used. The final billing unit is the product of the two measures and this is called a “kilowatt-hour” (kWh).
An example to measure electricity for a 100-watt light bulb that is on for 10 hours:
100 watts ÷ 1000 = 0.10 kilowatts
.10 kilowatts × 10 hours = 1 kilowatt hour or 1 kWh