Counting the Cost
Paying for electricity is expensive because many of our appliances use electrical power of 1000 W or more.
With average electricity cost of 17 pence per kWh (UK prices, 2013), you can imagine how expensive it can get to run an oven, iron or electrical kettle.
When choosing an expensive electrical appliance we need to decide if an appliance is cost effective depending on:
- its capital cost (price and installation)
- running cost (fuel and maintenance)
- environmental cost (removal, disposal, taxes)
- other costs (bank loan, credit card interest rate)
Because electricity is expensive, people often choose to heat their homes in winter by using an alternate fuel like natural gas. Nevertheless energy bills have to be paid and the cost of investing in an insulation method like double glazing for windows or loft insulation has to be looked at in terms of its payback time (see slide). E.g. loft insulation might save £ 100 a year on fuel bills while double glazing might save just £10.