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Understanding Power Factor – Reasons for Low Power Factor

It is usually assumed that a low power factor implies low power consumed, and consequently a low electricity bill which is misleading. This blog might help break down the concept of power factor.

How much of the electricity drawn by electric/electronic devices is used for performing actual work, like heating up coils to toast bread in a toaster or run a water purifier to purify water by passing it through various filters etc, is called Active/ Real Power (kW). Now, in some cases, power is utilized not to produce some useful output, but consumed by the device itself. For example, in the electric motor (part of booster pump) of a water purifier, some portion of the power drawn is utilized to set up a magnetic field, required for the operation of the motor. This is seen as no useful work from the outside by the end consumer, but electricity is still utilized.This is called Reactive Power (kVAR) . A vector sum of Active and Reactive Power gives Apparent Power (kVA).

Now, power factor is simply the ratio of Real Power and Apparent Power and ranges between 0 and 1. If the power factor is low (close to zero), it implies that very little power out of the total drawn power by a device is used to perform actual, useful work.


Power factor is a way to find out how effectively you are using your electrical power. A high-power factor indicates effective utilization of electrical power, whereas low power factor signifies inefficient use of electrical power. The device is considered to be very efficient if the power factor is close to 1.

The analogy below can be used to explain the components of power. The chips we eat represents the real power. The air (nitrogen) in the packet represents the reactive power. We however pay for the entire packet, even though we consume only some portion of it. The nitrogen in the packet is to prevent the chips from going stale and any damage during transit, so it has to be present in the packet. Similarly, the reactive power maintains the system voltage. It helps establish and maintain the magnetic and electric fields required by the system. Thus, like nitrogen, reactive power is necessary. If the reactive power increases beyond a threshold, the system becomes unstable and tends to draw more current from the source, or essentially a low power factor.

Reasons for low power factor 

(Note that all these issues result in a change of reactive/ real power)

  • Inductive loading – 90% of the industrial load consists of induction machines (single and three phase). Such machines draw magnetizing current to produce the magnetic field and hence work at low power factor.
  • Variations in power loading – When the system is loaded lightly, the voltage increases and the current drawn by the machines also increases. This results in a low power factor.
  • Harmonic currents
  • A condition known as 3 phase power imbalance occurs, due to improper wiring or electrical accidents. This results in low power factor too.

Reactive power is utilized by giving rise to no useful work. Thus, we pay for the apparent power, but utilize only the real power. When you have a low power factor, you are not fully employing the electrical power you are paying for. Utilities often penalize customers for low power factor as an incentive to compensate for this inefficiency.

Why do utilities levy a power factor penalty?

In India, if the power factor of the consumer drops below 0.85, they will be charged heavily. When the power factor is low, power and energy losses in power lines and transformers increase and the utilities include these costs in the electricity bill in the form of power factor penalty.

Power factor correction

Consumers can avoid power factor penalties by installing devices for power factor correction,

  • Install capacitors in the distribution system. While capacitor banks improve the overall system’s power factor, the individual machines which caused a drop in power factor would still remain the same. These machines can be serviced or improved into more energy efficient versions, to maintain a healthy electrical system.
  • Minimize operation of idling or lightly loaded motors
  • Install variable frequency drive (VFD) systems to lightly loaded induction motors
  • Install new motors that will be operated near their rated capacity
  • Replace lightly loaded motors with motors sized to be operated near their rated capacity
  • Avoid operation of equipment above its rated voltage.

(Source: Improving power factor to reduce energy demand charges, increase capacity)

Thus, it is important to pay attention to the power factor of your machines and your system as a whole, and utilize most of the power bought from the utilities to perform actual work. Maintain a healthy electrical system and avoid power factor penalties by staying informed about the electrical parameters of your place, with the help of energy monitoring devices like ones provided by Energyly.


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