To calculate Bitcoin mining electricity costs under time-of-use (TOU) rates, multiply the electricity consumed in each tariff period by that period's applicable price per kilowatt-hour (kWh), then add demand charges, fixed charges, and any other applicable charges not already included in those rates. Electricity is normally the largest recurring cost in Bitcoin mining. For accounts subject to TOU tariffs, the timing of consumption affects the energy charge. This article sets out a step-by-step calculation method and explains how to evaluate peak-hour shutdowns separately from mining revenue.
What Are Time-of-Use Electricity Rates?
The U.S. Energy Information Administration (EIA) defines time-of-day pricing as electricity pricing in which the price per kWh depends on the time of day, reflecting that generation and delivery costs are not constant throughout a 24-hour period (EIA glossary). A typical TOU tariff divides the day into two or three periods—commonly off-peak, mid-peak, and on-peak—with the on-peak rate applying during hours of highest regional electricity demand. Some tariffs also vary these periods by season, weekday versus weekend, or holiday status. The EIA does not publish individual utility tariffs or demand-charge schedules, so the specific hours, seasons, and per-kWh rates that apply to a given account must come from the utility's published tariff sheet or the operator's hosting or power-supply agreement, not from a general industry reference.
Why a Single Electricity Price Can Mislead Bitcoin Miners
It is common to see mining profitability estimates built around a single assumed electricity price, such as "$0.08/kWh." Under a TOU tariff, an assumed price that does not reflect the operation's consumption in each tariff period can understate or overstate the energy charge. A correctly energy-weighted average rate can reproduce that charge exactly and can also be used for forecasting when it reflects the expected load schedule. It must be recalculated if the distribution of consumption across tariff periods changes. A related error is substituting a state or national average retail electricity price for an individual tariff rate. The EIA explains that published average retail electricity prices are calculated as total revenue divided by total electricity sales, and that these averages include blended generation, transmission, distribution, tax, and fee components—they are not the rate schedule applied to any single customer (EIA FAQ). A mining operation's actual cost per kWh can differ meaningfully from a published state average once TOU timing, demand charges, and fixed charges are taken into account.
A Formula Framework for TOU Mining Electricity Costs
Start with metered kWh for each tariff period. If those readings are unavailable, estimate consumption using average power and elapsed hours covering the same measurement window.
Step 1 — energy use per period:
Energy use (kWh) for period i = average power over the full period i (kW) × total hours in period i
The average must include any downtime, standby consumption, and auxiliary loads within that period. Do not multiply an average that already includes downtime by a second uptime adjustment. If using separate running and standby power estimates, calculate the kWh for each state and add them together.
Step 2 — TOU energy charge:
TOU energy charge = sum over all periods of (energy use in period i × applicable rate for period i)
Step 3 — total electricity bill:
Total electricity cost = TOU energy charge + demand charges (if applicable) + fixed customer charges + other applicable charges not already included in the TOU rates
Keeping these three steps separate matters because they are billed differently. TOU energy charges are assessed per kWh consumed. Demand charges, where they apply, are based on the customer's maximum billed electric demand under the rate schedule, typically measured over a 15-, 30-, or 60-minute interval, and are not calculated per kWh (EIA glossary). Fixed customer charges generally remain unchanged when consumption falls. Delivery charges, taxes, and riders must be calculated on their stated billing basis: they may depend on kWh, billed demand, a percentage of specified charges, or a fixed amount. Add each component only once. An all-in average cost per kWh can summarize an actual or forecast bill, but it does not show which charges would be avoided by reducing consumption.
Collecting the Inputs
An accurate TOU calculation depends on four inputs, each of which should be verified rather than assumed.
The first is the utility tariff itself, including the exact clock hours assigned to off-peak, mid-peak, and on-peak periods, any seasonal or weekday/weekend variation, and the per-kWh rate for each period. The second is metered power draw at the correct measurement point. For a single ASIC, a plug-level power meter may be adequate. For a larger site, the more reliable input is the power measured at the site's billing meter or main distribution point, since cooling, ventilation, pumps, networking equipment, and conversion losses may all appear on the same utility bill as the ASICs themselves. Using ASIC nameplate wattage alone will typically understate the billed load of a facility. The third input is the timing of electricity consumption within each tariff period. If estimating kWh, match the power average to the hours it covers and account for running, standby, and shutdown states. Productive mining uptime is not interchangeable with powered time: equipment may still consume electricity when it is not submitting accepted shares. The fourth is any additional charge that applies under the tariff, including demand charges, fixed monthly charges, taxes, and riders. Confirm each charge's billing basis and whether it is already included in the quoted per-kWh rate.
Worked Example: Calculating a 30-Day TOU Electricity Bill
The following example is illustrative only; it does not represent a real utility tariff or ASIC specification. Assume a facility with a constant metered load of 3.5 kW, operating 24 hours per day, under a hypothetical three-period TOU schedule. The same schedule applies on all 30 days, and there are no additional taxes, riders, or delivery charges beyond the charges specified below.
| Period | Hours/day | Rate ($/kWh) | Daily energy use (kWh) | Daily energy charge |
|---|---|---|---|---|
| Off-peak | 12 | 0.06 | 42 | $2.52 |
| Mid-peak | 8 | 0.10 | 28 | $2.80 |
| On-peak | 4 | 0.20 | 14 | $2.80 |
| Total | 24 | — | 84 | $8.12 |
Over a 30-day billing period, total energy use is 2,520 kWh and the TOU energy charge is $243.60. Dividing the energy charge by total kWh gives an energy-weighted rate of roughly $0.0967/kWh, or about 9.67 cents/kWh. Using the energy-weighted rate at full precision, multiplying it by 2,520 kWh reproduces the $243.60 energy charge. It can also support a forecast using the same rates and distribution of consumption across tariff periods.
If the same tariff includes a $15/kW monthly demand charge based on a billed demand of 3.5 kW, and a $25 monthly fixed customer charge, the full bill becomes:
- Demand charge: 3.5 kW × $15/kW = $52.50
- Fixed charge: $25.00
- Total bill: $243.60 + $52.50 + $25.00 = $321.10
- Effective all-in cost: $321.10 ÷ 2,520 kWh ≈ $0.1274/kWh, or about 12.74 cents/kWh
This effective all-in figure summarizes the bill under the example's assumptions. It should not be treated as the marginal cost avoided by switching off equipment for part of a day, because fixed and demand charges do not necessarily scale down in proportion to reduced hours.
Assessing Peak-Hour Curtailment
Calculate the avoided energy charge from the reduction in consumption during on-peak hours:
Avoided energy charge = kWh not consumed × applicable on-peak rate
For total bill savings, also account for changes in separately billed usage-based delivery charges, riders, applicable taxes, and any demand charges affected by curtailment. Do not count a component again if it is already included in the on-peak rate. Fixed customer charges generally remain payable.
In the worked example, assume the entire 3.5 kW load switches off for the four on-peak hours, with no residual consumption. This removes 14 kWh billed at $0.20/kWh, reducing the daily energy charge from $8.12 to $5.32—a saving of $2.80 per day. If networking, standby equipment, or cooling remains powered, use the difference between running and curtailed load to calculate the actual kWh avoided.
Two further qualifications matter. First, whether curtailment reduces billed demand depends on the tariff's demand measurement rules. Under an all-hours maximum-demand charge, reaching 3.5 kW during other hours can leave the demand charge unchanged. A tariff with a separate on-peak demand charge may produce a different result. Second, electricity savings alone do not establish whether curtailment is the better economic choice. Compare the avoided costs against the mining revenue forgone during the same hours, in the same currency, and include any additional costs of stopping and restarting equipment.
Mining revenue is not static. Refresh the hashrate, network difficulty, transaction-fee, and coin-price assumptions used to estimate forgone revenue. Coin prices affect the fiat value of mining earnings; a price change alone does not change the amount of BTC mined.
A related but distinct arrangement is a demand-response or curtailment program, under which a grid operator or utility compensates a large load for reducing consumption during specified events. Such payments have their own eligibility, dispatch, baseline, and settlement rules set by contract, separate from the standard TOU tariff. Track demand-response compensation separately from avoided electricity charges and include it only once when comparing the economics of curtailment.
Common Mistakes to Avoid
Several recurring errors distort TOU electricity-cost calculations for mining operations. Using a state or national average retail electricity price in place of the applicable tariff rate is one of the most frequent, since published averages blend many cost components across customer classes. Omitting separately billed delivery charges, riders, or taxes will understate total cost, while adding components already included in the quoted rate will overstate it. Treating a demand charge as if it were billed per kWh, rather than per kW of billed demand over the tariff's demand interval, produces an incorrect cost allocation. Using ASIC nameplate wattage instead of metered site load will miss cooling, ventilation, and facility overhead that the utility bill actually includes. Finally, electricity expense should be calculated separately from mining revenue and other operating costs. If a hosting package includes electricity, identify that overlap before combining costs so the same electricity expense is not deducted twice.
Using a Mining Calculator Alongside a TOU Worksheet
A mining profitability calculator and a TOU electricity worksheet serve different, complementary functions. ViaBTC's mining calculator, for example, estimates daily mining earnings from inputs such as hashrate, network difficulty, and pool fees; it does not calculate ASIC power consumption, electricity rates, or hosting charges (ViaBTC Mining Calculator guide). The TOU worksheet described in this article performs the opposite function: it calculates electricity expense from metered power use and tariff rates, independent of mining revenue. Combining the two, in the same currency and over the same time window, gives an estimate of mining revenue after electricity expense, before other applicable costs. Account separately for hosting services, maintenance, hardware cost recovery, and other relevant expenses when assessing overall mining economics. If hosting charges already include electricity, do not deduct that electricity expense again.
FAQ
Does a TOU rate automatically mean mining is cheaper at night?
Only if the tariff's off-peak period is defined as overnight hours and the off-peak rate is lower than mid-peak or on-peak rates. The specific hours and rates vary by utility and must be confirmed from the applicable tariff rather than assumed.
Can I use my state's average electricity price instead of my utility tariff?
No. Published average retail electricity prices reflect total utility revenue divided by total sales across all customers and do not represent any individual tariff's TOU periods, demand charges, or rate structure.
Is a demand charge the same as an energy charge?
No. An energy charge is billed per kWh consumed. A demand charge is based on the customer's maximum billed demand in kW over a defined interval and does not vary directly with total energy consumed.
If I shut down during on-peak hours, do I avoid the full effective all-in electricity cost for those hours?
No. Calculate savings from the kWh actually avoided at the applicable on-peak rate, plus any changes in separately billed variable charges and taxes. Fixed customer charges generally remain, and demand-charge savings depend on the tariff's demand measurement rules. The all-in average is not the marginal saving from shutting down.
Should mining revenue estimates be treated as fixed when planning around TOU rates?
No. Refresh assumptions such as your hashrate, network difficulty, transaction fees, and coin prices when comparing forgone revenue with electricity savings. Coin prices change the fiat value of earnings, not BTC output by themselves.
References
- U.S. Energy Information Administration, Glossary: Time-of-day
- U.S. Energy Information Administration, Glossary: Demand charge
- U.S. Energy Information Administration, FAQ: Electricity prices
- ViaBTC, How to Use ViaBTC's Mining Calculator as a New Miner