Power Factor Correction: What It Is and Why Your Site Might Need It?

If you’re working on a commercial or industrial site and your client’s electricity bills seem higher than expected, or equipment is overheating without an obvious reason. You could be dealing with a poor power factor. In this article, we’ll discuss what Power Factor Correction (PFC) is, why it matters, and how to spot signs that a site might benefit from it.

What Is Power Factor?

Power factor describes the amount of real power transmitted along a transmission line relative to the total apparent power flowing in the line. In AC circuits, it is the ratio of real power (used to perform work) to apparent power (total power drawn from the source).

A perfect power factor is 1 (or 100%); this means that all power drawn from the grid is being used efficiently. Anything less means wasted energy and potentially higher costs.

Why Does Poor Power Factor Matter?

If your site suffers from poor power factor, it can cause a range of issues on-site:

Increased electricity bills due to higher apparent power usage.

With an overloaded system, your equipment, like transformers, cables, and switchgear, has to work harder.

You risk the potential of penalty charges from energy suppliers for inefficient power usage.

With the overall system capacity reduced, your future equipment upgrades that you set to do could require more infrastructure, taking more time and money.

What is Power Factor Correction?

Accepted universally as one of the first steps recommended to reduce energy costs and improve energy efficiency. It works by “correcting” an inefficient electrical load of supply. Capacitors are automatically switched into the circuit to counteract the effects of an inductive load, which is produced by all machinery that uses motors.

These capacitors are often housed in PFC panels or capacitor banks and are installed in switchboards or distribution boards.

How to Know If a Site Needs Power Factor Correction

Specialist equipment isn’t always needed to know something is wrong with your system. It is important to look out for the following:

• Higher than usual electricity bills with no clear explanation.
• Sites that use large inductive loads (e.g., compressors, motors, and welding gear)
• The energy supplier reports a low power factor.
• Your equipment frequently trips or overheats.

What Are the Benefits?

When you add PFC equipment to a site, it helps to bring several long-term benefits:

• Lower energy bills – by reducing wasted power, you are able to save on your energy bills as your system becomes more efficient.
• Removal of “Reactive Power” charges (penalty for operating an inefficient electrical supply)
• Reduction in kVa “Availability” and “Capacity” charges
• Reduction in kW/h losses
• Reduction in CO₂ emissions
• Reduction in circuit currents
• Improved utility

Which Sites Typically Need It?

• Power factor correction is particularly useful for:
• Factories and workshops
• Commercial buildings
• Hospitals
• Larger offices
• Shopping centres
• Warehouses

When a site has large motor loads or a significant lighting footprint, it’s definitely worth the power factor.

Case Study – Vinyl Floor Manufacturer

After a PFC, a vinyl floor manufacturer saw these changes to their business.

Annual savings achieved

£49,929

253.27 Tonnes CO₂

169685 kW/h Site

471600 kW/h inc. transmission

System Savings

1496 Amps per phase

1076 kVA Demand

Payback – R.O.I.

11 months

Power factor correction is a behind-the-scenes upgrade that can make a huge difference to a site’s performance, efficiency, and bottom line. Whether you’re designing a new panel, upgrading an old one, or helping a client reduce their energy bills, PFC should be part of the conversation.