Using highly inductive loads, such as transformers, electric motors and high-intensity discharge lighting, may lead to reduction in power factor. Consumption of unappreciable amount of power also results in the same.

You see, power factor can range from zero to one. The power factor of an AC electric power system is defined as the ratio of the real power flowing to the load over the apparent power in the circuit. When the current and voltage waveforms are out of phase, you get a value less than one.

Unlike resistive loads, which create heat by consuming kilowatts, inductive loads require the current to create a magnetic field, and then the magnetic field produces the desired work.

Reactive power, the non-working power caused by magnetizing the electrical current and is required to operate the device (measured in kilovars, kVAR), increases the amount of apparent power (measured in kilovolt amps, kVA) in a distribution system. The increase in both reactive and apparent power causes the power factor to decrease.

Methods to improve power factor range from using synchronous condensers to capacitor banks to optimized inductive loads. Additional considerations include minimizing operation of idling or lightly loaded motors, avoiding operating equipment above its rated voltage, and replacing standard motors as they burn out with more energy-efficient ones.

That said, even through implementing these tactics, power factor is significantly affected by variations in load and ultimately your electricity bill will not decrease noticeably. Instead, installing a power factor corrector should allow you to achieve comprehensive efficiency improvements throughout your entire system and significantly lower your electric bill.

Now, the U.S. Department of Energy recently posed the question:  Why improve your power factor?”  Their answer is boldly to the point: “Because your electricity bill will be smaller.”

While this may seem a bit flip in response and goes without saying, some additional benefits to improving your power factor include:

• Reduced energy consumption
• Dynamic surge protection
• Reduced heat from motors (and greater operational efficiency)
• Lower overall demand charge
• Increased life of inductive motors (such as air conditioners, refrigerators, washers)