What is 1 unit of electricity and how to estimate your bill
Tariffs & billing · 6 min read · Updated 2026-04-21
TL;DR
1 unit usually means 1 kWh. Bill estimate ≈ units × tariff (₹/kWh), plus fixed and demand charges. Commercial consumers may be billed in kVAh, so PF can raise billed units.
1 unit = 1 kWh (most common meaning)
kWh is energy: using 1 kW for 1 hour = 1 kWh = 1 unit.
A 1.5 ton AC drawing ~1.5 kW for 2 hours uses ~3 units (approx).
Why your bill amount isn’t just units × rate
- —Fixed charges and meter rent
- —Demand charges (commercial)
- —Taxes/duties and fuel adjustment charges
- —Time-of-day slabs and tariffs
Commercial bills: kVAh and PF impact
If you’re billed in kVAh, improving PF reduces the gap between kVAh and kWh and can lower the effective bill even if kWh stays the same.
Frequently asked questions
Is 1 unit always 1 kWh?
In normal usage, yes. Some commercial bills display kVAh, which is a different unit used for billing in certain tariffs.
Why does my unit rate change?
Tariffs may be slab-based (more units → higher rate) and may include monthly fuel adjustment surcharges.
How can I reduce units quickly?
Start with HVAC scheduling, fixing idling loads, and making usage transparent with sub-metering.