Power Factor Correction

Power Factor Correction: An Investment to Reduce Your Energy Costs

Power factor correction (PFC) is a critical aspect of energy efficiency in many industries. In essence, PFC is the process of optimizing the ratio of active power (used to do work) to reactive power (used to maintain electromagnetic fields) in an electrical system. When PFC is properly implemented, it can significantly reduce energy waste and associated costs.

What is Power Factor Correction?

Power factor is a measure of how effectively an electrical system utilizes the power it receives. It is the ratio of active power (measured in watts) to apparent power (measured in volt-amperes). Reactive power is the portion of apparent power that is not used to perform useful work but is instead used to create magnetic fields.

In an ideal electrical system, the power factor is 1. Which means all the power delivered to the system is used to do useful work. However, in many real-world scenarios, electrical systems have a lower power factor due to the presence of inductive loads such as motors, transformers, and fluorescent lights. For an illustrative video of how PFC works, watch Engineering Mindset’s ‘Power Factor Explained’ video.

Low power factor can lead to several problems, including:

  1. Higher energy costs due to increased power consumption
  2. Increased demand charges from utilities
  3. Reduced electrical system capacity
  4. Increased voltage drop

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Why is Power Factor Correction Important?

PFC is critical in many industries, particularly those with large inductive loads such as factories, data centers, and hospitals. These industries often have high energy bills and are subject to demand charges, which are based on the peak demand for electricity during a billing period.

By improving power factor, these industries can reduce energy consumption, lower demand charges, and increase the capacity of their electrical systems. This can result in significant cost savings and improved system reliability.

Furthermore, PFC can also have environmental benefits by reducing energy consumption and associated greenhouse gas emissions.

How is Power Factor Correction Implemented?

PFC is typically implemented using capacitors, which store energy and release it as needed to reduce reactive power. Capacitors can be installed at various points in an electrical system, such as at the load or at the point of common coupling (PCC) between multiple loads.

The amount of capacitive power required for power factor correction depends on the specific electrical system and load characteristics. Therefore, a PFC study can help determine the optimal placement and size of capacitors to achieve the desired power factor.

In some cases, other power factor correction equipment such as harmonic filters or active power filters are needed to address other power quality issues.


Power factor correction is an important aspect of energy efficiency in many industries. By improving the power factor of an electrical system, businesses can reduce energy consumption, lower costs, and increase system reliability. The most common device used for power factor correction is a capacitor. A power factor correction study can help determine the optimal implementation for a specific electrical system.

SmartSave can connect you with one of the best power factor experts in the country. Contact Us today to schedule a discovery call.