What Is Power Factor? A Definitive Guide For Everyone

hexeiscoEnergy Management, Power Factor

What is power factor?

Poor power factor costs money so it’s worth knowing what it is and what can be done to reduce your costs. This article will show you that behind all the jargon power factor is a simple concept anyone can understand.

Power factor is basically a measure of how effectively you are using the available capacity of electrical equipment to consume electricity to your site. A power factor of 1 means that you are using the capacity of your electrical equipment very effectively, whilst a power factor of 0.5 means you are using the capacity of your electrical equipment very poorly.

Why do I care what the power factor is?

The reason power factor has become a hot topic in recent years in Australia and particularly in Queensland is because the utilities (Energex and Ergon in Queensland) will be applying power factor related charges to many more of their customers than before. There have also been changes to the way the impact of power factor is charged for large customers who have already been charged for power factor. For Energex and Ergon customers on a SAC demand tariff, typically users consuming less than 4 GWh and more than 100 MWh in a year, they will now be charged by kVA for demand related network charges. Billing network charges based on kVA takes into account the extra capacity required due to the power factor of the customer load.

Because power factor is a measure of your effective use of equipment capacity, poor power factor will cost you money in other areas as well.

Firstly because of poor power factor a greater total amount of current must flow in your system to provide the power you will use and this means you will need physically larger cables, higher rated switch boards and any other power distribution equipment used on your site. Get this wrong and you risk power interruptions and worst case a fire from overloading the equipment.

Secondly poor power factor causes increased wear and tear and shorter operational life of electrical equipment such as mains cables, transformers, and motors.

Why utilities charge for power factor?

Utilities charge for poor power factor because it impacts the equipment capacity they must install and maintain. If your ratio of capacity required versus power used is less than optimal they will want to charge you for tying up expensive equipment capacity. If so, there may be a case for fixing the problem at its source or with some form of power factor correction.

To power factor correct or not?

Before you race off to buy and install expensive power factor correction equipment, it would be a good time to step back and look at the options. Especially given we have clients who were surprised to discover that power factor correction equipment requires expensive ongoing maintenance, monitoring and periodic replacement of significant components due to normal wear and tear.

Firstly, is your power factor bad enough to warrant changes. This may seem like an obvious question however I was talking to a customer only a few weeks ago who was going through the early stages of acquiring power factor correction even though his power factor is only 0.9 and the actual tariff rates that will be applied to the kVA demand network component has not been made public yet.

Second, if you have bad power factor it is because something on your site is causing it and it may be cheaper, both in capital expense and longer term power efficiency, to fix it at the source rather than apply the power factor correction band aid.

Thirdly, before a determination can be made about what form of correction should be considered it is necessary to know what type of power factor is dominant. Use the wrong type of power factor correction equipment and not only will you not make any savings but you could make it worse.

Involve a specialist, like Hexeis, to take the guesswork out of your energy efficiency and power quality decisions.

Technical fundamentals of power factor for the inquisitive.

The first thing to know about electricity is that it is normally delivered to your office, factory, and house as Alternating Current or AC power. A picture of this can be seen below in figure 1. This is in contrast to Direct Current or DC power which a solar panel generates or is how electricity is delivered by a battery. AC power in Australia is delivered at a nominal 230 Volts (+/- 10) and 50 cycles per second (or Hertz), so picture below is what is happening 50 times per second.

Voltage gives electricity it’s potential to do work for you and when combined with the amount of current that is flowing gives you the power available. Power is an instantaneous quantity, that is, it has a value at a moment in time. Power is measured in Watts. For example the power of a home appliance such as a vacuum cleaner may be 1800 Watts.  Energy is the work or power delivered over time so there is always a time component to your electricity bill. For a residential bill this is kWh which is thousands of Watt hours. For the example above using the vacuum cleaner at full power for an hour would use 1.8 kWh of energy.

What is power factor

Voltage and Current Waveform for a power factor = 1

Figure 1 Alternating Current

What is power factor then?

OK so, in a perfect world, electricity leaves the power station as a nice wave shape with the voltage and the current aligned and in step. This is called in phase, as shown in figure 1, and is referred to as having a power factor of 1 or 100%. Perhaps surprisingly the current waveform can also be offset from the voltage waveform, as shown in figure 2. In this case the current is lagging the voltage and the peak current is occurring at the zero crossing point of the voltage so is known as having a power factor of 0 or 0%.

What is power factor

Voltage and Current Waveform for a power factor = 0

Figure 2 Current lagging the Voltage by 90 degrees

Current can also lead the voltage waveform in which case the power factor will be negative. Power factor then varies between -1 and 1 and tells us how much the current leads or lags the voltage.

The actual number for power factor is calculated as the Cosine of difference between the voltage and current. When the voltage and current are together, as in figure 1, the angle is zero and the Cosine is one.  At the other end of the spectrum when the voltage and current become as far out of sync as in Figure 2 there is no real power available to the load, it is all reactive power, which is a waste as it does no work, and yet places the same demands on the electrical infrastructure.


This publication is not intended to be a comprehensive review of all developments , or to cover all aspects of those referred to. Readers should take professional advice before applying the information contained in this publication to specific issues.