How do you achieve savings through Power Factor Correction?

A Simple Explanation is: As Power Factor drops the demand for power to run the same equipment in your business rises resulting in higher KWh used to perform the same amount of work.

From another perspective: Say you need 1 kW of real power (the actual power needed) to operate a piece of equipment, if the power factor is Unity (=1), 1 kVA of apparent power (power passing through you meter) needs to be transferred from the power source through your meter to your equipment for you to have 1 kVA available. A formula expressing this is (1 kW ÷ 1(PF Unity) = 1 kVA). At low values of power factor, more apparent power needs to be transferred to get the same real power. To get 1 kW of real power at 0.2 Power Factor, 5 kVA of apparent power needs to be transferred through your meter, (1 kW ÷ 0.2 = 5 kVA). If you multiply this times hours your equipment runs you will have the KWh usage for a piece of equipment.

Devices using AC (Alternating Current) power to operate consume both real and reactive power. The vector sum of real and reactive power is the apparent power. The presence of reactive power causes the real power to be less than the apparent power, and so, the electric load has a power factor of less than 1.

We hope this explanation helped but if you feel the need for more information we recommend the website www.thepowerfactorsite.com