Power Factor

Power factor waveform


Power Factor is a measure of how efficient your plant is in converting energy drawn from the grid to useful energy.  Particularly in industrial applications, not all the electricity (total power) that is drawn from the electrical grid is actually used by equipment and machinery (working power) to do work.  The ratio between the actual energy used and the energy drawn from the grid is termed the power factor and it is expressed as a number between 0 and 1. The higher the power factor (close to 1) the more efficient the plant is.

A simple analogy to better understand Power Factor is the Beer Analogy.

Beer Analogy for power factor

The Power Factor (P.F.) is the ratio of working Power to total Power i.e. Beer ÷ (Beer + Foam). The more foam you have the lower the power factor.

The working power is that power that is responsible for doing useful work, such as rotating pumps, light, heating, etc…. It is referred as active or real power and is measured in kilowatts (kW).  On the other hand, non-working power does not produce useful work but is there to build up magnetic fields in equipment such as motors, pumps, ballasts, etc… It referred to a reactive power. Total power is the combination of the working power and the non-working powers.

Implications of low power factor

A plant with a low power factor means that more current has to be drawn from the grid to do the same work when the power factor is high (close to 1).  Apart that this can have a direct implication on the energy bills, all the power system equipment within the plant such as transformer, cables, circuit breakers, etc… will have to carry additional current unnecessarily. This will increase the losses in the system and might lead to overload of equipment.


Consider a factory that has a total load of 100kVA.  If the power factor is 0.7, the equipment will draw 206A per phase to supply the load, but if the power factor is 1, the equipment will draw 144A per phase.

Figure 1 illustrates a case of a motor. When the power factor is low, the non-working power (reactive power – Q) is drawn from the supply hence a current of 206A if we take the case above.

energy transfer  without  compensation

However, if the power factor is unity, the reactive power – Q will be supplied by a corrective unit as shown in Figure 2. Hence, the current drawn from the grid reduces. For the case above it reduces to 144A from 206A..

energy transfer with compensation

This will have an implication on both the losses in the electrical distribution system and the electricity bills!

Why improving the Power Factor?

Improving the power factor will lead to various benefits such as

  1. Savings from your energy bills;
  2. Reduction of transmission losses;
  3. Minimisation of the overloading risks and abnormal tripping of equipment.

As concerns the consumer, the simple answer is to save on energy bills. In Malta, for non-residential sites one can choose between 2 tariffs; Non-Residential kWh and Non-Residential kVA (Tariffs). Table below shows the cost per unit consumed for different bands for the kWh and kVAh tariffs (2015).

Arms Electricity tariffs

As shown in the Tables, for non-residential premises with a low power factor the sensible option would be to opt for the kWh tariff. This might look strange at first sight as kWh tariff is more expensive than the kVAh tariff, however metered kVAh units will be much more as exemplified above.

On the other hand, for non-residential premises with a high power factor the most advantageous tariff is the kVAh tariff as with a high power factor the kVAh will be close or equal to the kWh consumed. Of course this depends on the level of power factor correction installed.

Case Study

The following results are from a case study conducted in Malta within a company with an average consumption of 280units per hour and a power factor of 0.7. The company was being charged using the most advantageous tariff for low power factor scenarios, i.e. the kWh tariff. After installing a power factor correction equipment to improve the power factor from 0.7 to 0.99 and changing the tariff to kVAh the annual utility bill dropped by nearly €35,000.

If you want to know more on how you can benefit from such savings on your utility bills, feel free to contact us for a free consultation.