Electricity pricing

Electricity pricing (sometimes referred to as electricity tariff or the price of electricity) varies widely from country to country and may vary significantly from locality to locality within a particular country. There are many reasons that account for these differences in price. The price of power generation depends largely on the type and market price of the fuel used, government subsidies, government and industry regulation and local weather patterns.

In standard regulated monopoly markets, electricity rates typically vary for residential, commercial and industrial customers. Prices for any single class of electricity customer can vary by time-of-day or by the capacity or nature of the supply circuit (e.g., 5 kW, 12 kW, 18 kW, 24 kW are typical in some of the large developed countries); for industrial customers, single-phase vs. 3-phase, etc. If a specific market allows real-time dynamic pricing, a more recent option typically following the introduction of electronic metering, prices can even vary between times of low and high electricity demand.

The actual electricity rate (cost per unit of electricity) that a customer pays can be dependent on total usage, particularly for small customers (e.g. residential users).

The cost also differs by the power source. In the U.S. the typical cost of electricity for different sources are: coal (6-14 cents), gas (5-21) including gas peaker plants, wind (3-6 cents), nuclear (10-14 cents), utility scale solar (5-6 cents), roof top solar (9-19 cents). Renewable sources have reached grid parity in parts of the world where conventional power plants based on fossil fuel are costly enough (e.g. transportation cost of diesel to isolated communities).

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