What is Power Factor?
Power factor (PF) is the ratio of real power (kW) to apparent power (kVA) in an AC electrical system. It is a dimensionless number between 0 and 1 (or expressed as a percentage) that describes how effectively electrical power is being converted into useful work. A PF of 1.0 means all the supplied current performs real work; lower values indicate that some current flows back and forth as reactive power without doing useful work.
Mathematically: PF = P (kW) / S (kVA) = cos θ, where θ is the phase angle between voltage and current waveforms.
Why Does Power Factor Matter?
Low power factor increases the apparent current drawn from the supply for the same amount of real work. This has several consequences:
- Higher cable and transformer losses — resistive losses are proportional to I², so excess current wastes energy as heat.
- Larger infrastructure — switchgear, cables and transformers must be rated for apparent kVA, not just real kW.
- Utility penalties — most commercial and industrial tariffs include a PF penalty clause. Below PF 0.85 or 0.90 (depending on the utility), customers pay surcharges on maximum demand.
- Voltage drop — reactive current causes additional voltage drop along distribution feeders.
How to Improve Power Factor
The most common and cost-effective method is adding capacitor banks at the main distribution board or at individual motor terminals. Capacitors supply reactive power locally, reducing the reactive component drawn from the grid.
- Fixed capacitor banks — suited to loads with stable, predictable reactive demand.
- Automatic power factor correction (APFC) panels — switch capacitor steps in and out automatically to maintain a set PF across varying loads.
- Synchronous condensers — rotating machines that can both absorb and generate reactive power; used for large industrial installations.
- Active front-end drives — modern VFDs with active rectifiers present near-unity PF to the supply.