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Compare electricity, then check the full cost
Appliance comparison calculator.
Compare annual electricity costs. Use the extra upfront cost between two choices, or the full cost when replacing a working appliance.
The calculation
Annual saving = (first kWh − second kWh) × rate
Simple payback = extra upfront cost ÷ annual saving
A worked example
Suppose two choices use 600 and 350 kWh per year. At an illustrative $0.20/kWh, the difference is $50 per year. A $400 premium takes eight years to recover from electricity savings alone.
Compare like with like
Use the same method for both energy inputs. Labels should be from comparable product sizes and test standards. If one figure is measured and the other is a label, record that difference. A larger appliance may do more work while using more total energy.
When there is no payback
If the new choice uses the same energy or more, energy savings cannot recover a positive premium. A negative saving is an extra annual electricity cost. A zero premium needs no extra cost recovery.
Other ownership costs
Simple payback covers the upfront cost and annual electricity savings. Evaluate these factors separately: installation, repairs, disposal, finance costs, rebates, electricity price changes, and the remaining life of the working appliance. It also excludes non-electric fuel.
Compare energy use, replacement cost, and the remaining life of your working appliance before buying. See the replacement payback guide for a fuller decision.
Source
FTC EnergyGuide guidance explains why local price and personal use affect costs. Use comparable annual energy figures and your electricity price in the worked example.
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