How Much Does Electricity Cost


Electricity is one of the most necessary components in our lives and more so in today’s industrialized world.

The question of how much does electricity cost is one with a wide scope of answers and which will be answered differently according to who you ask.

Electricity is measured in units that are the kilowatt hours.

Subsequently, each nation or region will determine the cost of electricity by setting the amount of money the consumers will pay per kilowatt hour (Kwh) plus other taxes and tariffs.

Here are some of the factors that determine the cost of electricity in a region:

Type of fuel used

There are so many ways that electricity can be generated.

Depending on the type of fuel used to generate the electricity and the cost of the fuel, the power generation cost that will then be transferred to the consumer will vary. Generally, the more readily available the fuel is, the cheaper the cost of producing electricity will be.

Electricity Cost

This is why in third world countries; the cost of electricity is very high because they do not have a readily available source of fuel. Most times they rely on imported diesel to run their turbines.


Prices of electricity can vary greatly but they are generally regulated. Regulation may come from the government or from rival companies.

This is why the cost of electricity is highest in countries that have monopolistic power suppliers. Apart from the price regulations put in place by the government, they are free to charge whatever cost they wish for the electricity.

They also put a number of other taxes on top and this greatly affects the overall cost. Consumer organizations may also change the pricing of electricity by making reviews and demanding for a cut if indeed the price has been set at an unwarranted price that is too high.

Type of consumer

Electricity pricing is not the same even among the consumers living in one place. This is because different users get different charges and additional taxes.

Generally in all countries, domestic consumers pay much less as compared to industrial users and people who operate machinery. Considering that they use fewer units per month than the companies, they are charged lower rates and may have lesser additional costs to grapple with.

People who use electricity for commercial purposes generally pay more for it than those who merely consume it.

Other factors affecting electricity cost

There are several other factors that may make electricity charges to go up or down.

Some of these are seasonal changes. Where hydroelectric power is used, fluctuation in water volume in reservoirs may lead to a higher cost in electricity or a lower cost. This may not be the case with power from nuclear sources and also geothermal power.

Efforts are being made in most countries to move to renewable energy sources like biofuel which will in turn lower the cost of electricity since the cost of production will be lowered to almost zero.

Also Read >> How Much Does It Cost to Build a House

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