Taming Your Electricity Bill

There are many places in the world where you can take electricity for granted. Unfortunately, Nicaragua is not one of those places. In fact, even in a country where a beer in a bar costs less than 2 bucks, it’s still possible to run up a monster electricity bill in less than a month if you’re not careful. This article is all about taming these monster electricity bills in a vacation rental home in Nicaragua. That said, most of these best practices can be adapted to wherever in the world your vacation rental home is located.

Just use less electricity

Nicaragua uses a sliding scale to determine the amount you are paying per kilowatt. The more electricity you use the more expensive your price per kilowatt becomes. If you just use less electricity you’ll stay on the low end of the scale and your bills will be cheaper. For more on how this works, check out our previous blog post Understanding Your Nicaraguan Electricity Bill.

Have an electricity usage policy in place for your property

Like many owners, when we first offered our home for rental back in 2011, we wanted to be fair. We didn’t want to nickel and dime our guests with extra fees or limitations on how they could use our home. In return, we expected our guests to respect our requests and remember to turn off the A/C when it wasn’t needed. Seems reasonable, right? Apparently it’s not. We came to this realization after we opened a monthly bill and it was for $1300 US dollars. We almost fell over. We did some math and our guests would have had to have left all 4 A/C units on 24/7 for almost the entire 3 weeks they were there to rack up a bill of that magnitude. Our minds were officially blown.

Once we calmed down a bit we realized that this was entirely our fault. You can’t put a kid in room alone with a jar of cookies and not accept most, if not all, of the blame when someone’s dinner is ruined. It’s just human nature. So, about 8 minutes after seeing our $1300 electricity bill, our Electricity Usage Policy was born and every one of the properties we manage is using some version of it today. Basically, we allot enough electricity to cover regular use of the property and then add enough for 8 hours of blissful air conditioned sleep for each unit in the house. We check the meter with our guests when they check in and again when they check out and charge for overages. In the 1000+ rentals we’ve managed since we started using this policy, we’ve only ever charged a handful of groups for using over their allotted amount. Again, it all comes down to human nature…and lower electricity bills.

Invest in LED light bulbs

CFL (Compact Fluorescent Light) bulbs (a.k.a. the curly ones) are better than old-school incandescent bulbs but nothing can touch an LED bulb (Light Emitting Diode) for energy efficiency. LED’s are more expensive than the other options but they last 40 times longer than CFL’s or incandescent bulbs and use 1/3 to 1/30 the electricity. When you multiply that by every bulb in your home, you are definitely going to see the difference in your electricity bill.

Okay, get your math pants on because here we go. At our house we have 80 pot lights (I know, I know) and at least 8 of them are on for at least 6 hours every day. Given these facts the math breaks down as follows:

At these usage rates you are going to save about $9 per month on these 8 light bulbs alone which is enough to pay for at least one dimmable LED bulb per month. In 8 months your 8 bulbs are paid for and the rest is money back in your pocket…for the entire 25,000 hour lifespan of the bulb. If you are only using the bulbs 6 hours per day then each of your 8 lights will last you 139 months. Your total savings over this period would come to around $1200 taking into account the 8 months it took to to pay off the initial cost of the bulbs.

And, yes, I realize that this doesn’t account for all the money we spent on the other 72 bulbs that we don’t use every day. The pot lights were already there when we bought the place and we had to put something in them. I guess we could have just bought 8 dimmable LED bulbs and moved them from light to light as needed but that would have opened us up to endless “screw in a lightbulb” jokes and I’m not sure my ego could have taken it. That’s right, I “invested in me” and bought the extra LED bulbs. So sue me 😉

Not all air conditioners are created equal

By far, the biggest electricity hogs you can have in your home are air conditioners. Depending on your setup, you are looking at 1.5 to 3 kilowatts per hour for every machine in your house. If you are paying an average of 7 cordobas per kilowatt (approx. 20 cents) then a good night sleep can cost you between $2.62 – $5.25 USD. Multiply that number by the number of A/C’s in your home and again by the number of nights in a month and you can see how bills north of $500 USD are easily possible and that’s only to sleep at night. If you use your AC during the day as well then the sky’s the limit. Remember it’s a sliding scale so usage at these levels will send you rocketing up the rate chart.

Now that I have your attention, I’d like to introduce you to SEER ratings (Seasonal Energy Efficiency Ratio). Skipping all the technical jargon, machines with higher SEER ratings are more efficient than those with lower SEER ratings. You should be looking for something with a SEER rating of 16 or higher if you are buying a new air conditioner. If you are upgrading from an older unit, say SEER 8 or 9, the difference on your electricity bill will be well worth the investment. No more math required here. I just don’t have it in me.

Good luck and happy vacation rentals!

Coming Soon: Part II of Taming Your Electricity Bill