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Power Factor Explained

If your Power Factor is low, your business is likely to be paying more than you need to for your electricity, and penalty tariffs are likely to be applied to your electricity bill.


In an AC circuit, power is used most efficiently when the current is aligned with the voltage.

However, most electrical devices (particularly induction type electrical motors) tend to draw current with a delay, misaligning it with the voltage. What this means is more current is being drawn to deliver the necessary amount of power to run the equipment. And the more current that is drawn with a delay to voltage, the less efficient the equipment is.

Power factor is a way of measuring how efficiently electrical power is being used within a facility's electrical system, by taking a look at the relationship of the components of electric power in an AC circuit. These components are referred to as Real Power, Reactive Power and Apparent Power:


Real Power (KW) is power that is put to productive use in your business; energy that can be converted directly into mechanical energy producing a result (i.e; electricity to provide RPM’s in a motor).

Reactive Power (KVAr) is the term used for wasted power, which is required to produce a magnetic field to enable real work to be done by electrical equipment that produce a magnetizing flux for operation. Reactive Power is most often used by inductive loads such as transformers, electric motors, refridgeration, fluorescent lighting and air-conditioning motors, which can make up a large proportion of the power consumed in a lot of businesses.

Apparent Power (KVA) is the crucial determinant for Power Factor, as it is the vector sum of the real power and the reactive power supplied by the distribution system to meet the energy demands of your business. This total power is the power supplied through the mains to produce the required amount of real power for the load.

Reactive Power is the component we place particular attention to in regards to correcting Power Factor.

Reactive Power is necessary for the generation of electromagnetic fields, commonly required to excite induction type electric motors, transformers and generators. Because these electromagnetic fields continuously fluctuate (develop and reduce) in line with start-up and other magnetic demands, the Reactive Power fluctuates between the electricity provider and the consumer site and causes Reactive Power to go out of phase with Active (Real) Power. The more inefficient the induction type electrical motors are on site, the more the Reactive Power is made to be out of phase with Real Power, and; the more inefficient the electrical network and electrical load demand profile.


Reactive Power increases the amount of Apparent (Total) Power drawn by a business through the distribution system and has a negative impact on the premises Power Factor.


Power Factor is expressed as a value between zero and one. If the ratio between real power and apparent power (the Power Factor) is 1, then all of the power supplied is being used for productive work. However, a Power Factor of 0.7, (a typical example) indicates that only 70% of the power supplied to your business is being used effectively and 30% is being wasted. The wasted power is referred to as Reactive Power.

An electricity load with a low Power Factor draws more current than is required, and puts unnecessary strain on the distribution network, requiring all energy distribution systems to be constructed larger for the allocation of reactive currents. Reactive Power does not travel well, where large losses are incurred when sending it over long distances, such as from central generators over transmission lines. This requires network providers to invest more on transmission lines, transformers, other equipment and maintenance to handle peak demand and maintain power reliability.


Reducing reactive power demands have both a benefit for the localised site, as well as the regional and local electricity network, and hence why the electricity providers apply a penalty for a inefficient power factor. 

Therefore, Reactive Power is much more effective if it is applied locally where it is needed, which is the primary responsibility of Power Factor Equipment (Capacitor Banks).