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In the evolving world of cryptocurrency mining, two major pain points often surface: the investment in mining hardware, and the running costs, particularly electricity. In this article, we are going to delve into the often intimidating world of electricity costs for mining activities – cutting through the confusion and providing insightful analysis on reducing such costs. As a reality check, we will also talk about the impact of solar power on mining and how to leverage it.
The Reality of Mining Electricity Costs
It would be wonderful to mine coins without grappling with enormous electricity bills, but the reality is, mining operations are power-hungry. With an increased number of GPUs working round the clock, it’s no surprise that the watts of power required would be significantly high.
At first glance, it might appear counterintuitive that with an increase in the total number of GPUs, and hence an increase in the overall watts consumed, the electricity bill would decrease. So, how does one accomplish this feat of reducing electricity costs while increasing the power consumed by mining operations?
A Closer Look at Electricity Usage
To illustrate, let’s take a real-world example of a mining operation. The servers are hooked up to a Power Distribution Unit (PDU) which feeds into the back of the mining rig with a total power consumption of about 1600 watts.
This rig might consist of a mix of diverse GPU models, all working in sync to mine cryptocurrency. With additional rigs hooked up, such as the ones running 1060s and 1080s or the 1660 ti’s, the overall power consumption could increase substantially – perhaps up to around 1290 watts – give or take, on a 30 amp 240 volt setup.
The Impact of Solar on Mining Operations
For those fortunate enough to have solar panels, there is a glimmer of hope – but how significant is their impact on managing electricity costs? Let’s delve a little deeper.
For example, if you were to have 48 panels installed on your property, depending on their orientation to the sun and other environmental factors, you would have a varying degree of power generation.
Over the course of the year, you might notice that the output changes substantially month to month. Some months you might produce peaks of up to 1750 kWh, while other months might see lows of around 1300 kWh.
Even at our peak of solar power generation, this energy is only enough to offset roughly a quarter of our total power usage based on the scenario outlined above. While solar is definitely helpful, it does not wholly nullify the cost of power in this example.
The Non-Negotiable Electricity Bill: A closer Look
Understanding the billing structure
When it comes to the electricity bill, there are three numbers you need to know: the distribution charge, the transmission charge, and the generation charge. These three numbers combine to make up the total cost per kilowatt/hour.
For example, your distribution charge might be 4.33 cents, your transmission charge at 2.45, and your generation charge summing up to 4.22 cents. When these are combined, you’re looking at an electricity cost of 11 cents/kWh. This is the number to enter when you’re using calculators like “what to mine” to provide an accurate estimate of expenses.
Shopping your Electricity
Interestingly, in certain geographic areas, such as Pennsylvania, some parts of the electricity bill are shoppable, meaning that you can shop around for a cheaper supplier. In this particular area, you can shop the ‘generation’ part of your bill which could ead to substantial savings, often helping to offset the costs associated with mining.
One solution comes in the form of unlimited electricity plans. Offered by certain suppliers, these plans provide a flat monthly rate for electricity supply, irrespective of how much electricity you use. To illustrate the potential savings, let’s consider a bill where the shoppable, or ‘generation’ part, was previously costing $227.60 per month. Under the new ‘unlimited’ plan, this cost could drop substantially to $69.99.
When you compare the total ‘power cost’ before and after the switch to the unlimited plan, the cost per kWh decreases from 11 cents to around 6 cents. This decrease represents a significant consideration when calculating mining costs and potential profits.
The key lesson here is understanding your power use and the intricate details of your power bill can lead to significant savings, reducing the cost overheads associated with mining. While renewable energy sources like solar offer some respite, they alone cannot cover the hefty power use of a mining operation. However, with careful consideration and innovative power solutions like unlimited plans, you can potentially cut your mining electricity costs and increase your overall profitability.