# Understanding Power Factor Correction and Its Benefits

Updated on January 26, 2016

## What is Power Factor?

In order to understand what power factor correction is and how energy can be saved… electrical energy, or power factor, needs to be defined. Electrical energy is made up of voltage and it’s current; think of water running in a river. The river symbolizes how big the voltage is, and the current is how fast the river is moving. The actual energy or “power factor” is the multiplication of both voltage times current. However, while there could be a strong flow, the water could be going in various directions like a river. If the water is moving strongly, but going sideways, it is not going to benefit the stream just like a running electrical current that requires correction will not benefit its application.

That’s what power factor is, and how it can be measured. It is the synchronicity between the voltage and current, and whether or not they are going the same direction.

## Where Does the Power Go?

A Limnologist cannot look at a river and not care about how much water is in it or in which direction it is moving because of the effect it has on the ecosystem. In this case, building managers and electrical engineers need to know what direction their power is going and how much of it is being used efficiently because of the effect it has on the application. A high power factor would mean that there is an efficient utilization of electrical power and a low power factor would mean that there is a poor utilization of electrical power.

The problem is that typically 50% of energy is wasted in power lines without electrical professionals even realizing it.

## Power Factor Correction

So how can the river flow in the right direction and what would that mean?

An energy management system would need to be installed that would fit the application in order to compensate for the reactive power required by the electrical energy. The size of the system would change as a function of the active power required by the installation, the current power factor, and the power factor required so that the "river could flow" the most efficient way possible and enable the power factor to become much lower.

Most electric utility companies charge for maximum metered usage based on either the highest registered demand in kilowatts (KW meter), or a percentage of the highest registered demand in KVA (KVA meter), whichever is greater. In other words, if electrical power is being lost in electrical lines because of a high power factor, electrical bills will be much higher.

If the power factor is corrected or "lowered", the percentage of the measured KVA will be significantly greater than the KW demand. Improving the power factor through the use of an energy management system will therefore lower demand charges because electrical energy will be used efficiently resulting in reduced electricity bills, and a far more efficient "river".

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