What is Power Factor Correction and How Can it Benefit My Business?

Author: rpm
Last modified: June 13, 2022

It’s a pretty safe bet that like everyone else in the current economy, you’re looking for ways to cut down costs and improve overall efficiency in your facility! Your organization’s use of power is part of that efficiency drive. And power factor correction therefore needs to take its place in your business strategy.

In the long run, power factor correction will

  • save you money,
  • offer a good ROI on the additional equipment you need, and
  • give extra benefits overall.

We’ll talk about these benefits in a moment.

But first, what is power factor, and why is it important to your business?

What is Power Factor?

A power factor definition goes something like this:

Power factor is the measurement of the power you use in your business and how effective it is. It sounds really simple. But if we break it down some more, we have to recognize two types of power: working power and reactive power.

All electrical appliances use working power to create heat, light, and motion. However, reactive power is slightly different. Reactive power is non-working power delivered to your establishment. For instance, reactive power keeps your machinery on and running (think “stand-by motors”) but doesn’t contribute to the overall end goal.

What we have to do is combine working power (useful, true power, kW) and reactive power to get total power (apparent power, kVA). And then find the ratio between those two to get this thing called the power factor.

Why is all of this important? Because the power factor is actually an efficiency rating! It’s a measure of how efficiently electrical power is changed into useful output.

Boom, it all just clicked, right? You were looking for efficiency in your energy usage!

How is Efficiency Rated Via the Power Factor?

The efficiency of your power (a.k.a. your power factor) is rated zero to one.

If your power factor is equal to one, that means it’s 100% efficient. If your power factor equals zero, essentially the power is not useful. You’ve probably heard the phrase “dirty power”, which simply means any unwanted reduction in power quality. A low power factor indicates dirty power!

Here’s the kicker: A bad power factor is anything less than 0.95, and a good power factor is above that number.

Okay, great. But what does that mean for your business efficiency?

The power factor of many uncorrected facilities is around 0.80. In other words, it’s 80% efficient, and – crucially – it needs to consume 20% more energy to work better.

That means you need to generate more power to make up this extra 20%, which raises your energy bills! And that’s what you’re wanting to avoid.

So, for the sake of both your business profits and the environment, this is where power factor correction needs to come into play in your energy strategy.

What is Power Factor Correction?

Power Factor Correction is technology that helps you reduce the amount of energy you use by improving your power factor number.

The installation takes the form of capacitors placed in your facility at origin or at the equipment point. These capacitors improve efficiency of the supply so you’ll use less current.

What Are the Benefits of Power Factor Correction?

Power Factor Correction benefits you and your business in multiple ways.

1 Avoiding power factor penalties

Your energy supplier may strike you with power factor penalties. They often penalize a power factor that’s around 0.85. However, these same suppliers incentivize one that’s 0.95 and above. It seems a small difference to bother about – but it puts money back in your business pocket.

2 Reducing other demand charges

Increasing your power factor number will reduce other demand charges on your energy bill. For instance, utility companies charge for maximum metered demand, based on whichever is greater, your kilowatts or KVA meter.

If you have a low power factor, your KVA meter will be a lot greater than your KW, for example.

3 Limiting wear and tear on equipment

Instead of spending thousands of dollars on upgrade costs, your investment in power factor correction capacitors prolongs the life of your machinery. The improvement allows equipment to carry new loads. It also improves the voltage of your equipment and enhances efficiency.

That’s all great, but how do you begin to implement these changes?

Rapid Power Can Help

Understanding all this technical information is one thing. Doing something about it is another! You don’t always have the time to audit and reorganize your energy usage yourself. You might be thinking right now that you’d prefer to partner with a proactive energy expert and simply cut your bills!

If so, Rapid Power is a specialist in mid-range commercial manufacturing companies within the non-regulated market. If you partner with us for energy optimization and smarter energy management:

  • we’ll conduct an onsite meter audit and power quality audit,
  • look for dirty power, locating where it disrupts your business, costing you millions of dollars,
  • offer power factor correction solutions customized for your unique needs, and
  • carry out harmonic mitigation, where appropriate, so you avoid hidden supplier charges.

We’re here for you and your business. If you’re ready to cut your costs with power factor correction and improve your business’s energy efficiency, send us a bill to analyze and start your savings journey today!

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