SPEP™ Power Factor Correction

Power Factor – The Hidden Cause of High Energy Bills

Poor power factor at your facility may be contributing to unnecessarily high energy costs. Your electricity bill should indicate that your meter measures either kW or kVA. These are not the same! If you are billed based on kW, then poor power factor is probably not an economic concern for your business, unless your energy delivery company charges a (poor) power factor penalty. Typically, penalties are assessed if the power factor measured at the meter is less than 95%. Alternatively, if you are billed based on measured kVA, then poor power factor translates directly into high energy costs.

How Does This Work?

Power Factor CorrectionMany electrical devices such as motors and even some lighting products can contribute to overall poor power factor. As an example, a self-ballasted compact fluorescent light bulb consumes 15W (true power) and operates at 120V. However, this particular light bulb is labeled 0.26A. 120V X 0.26A = 31.2 VA, (apparent power), which is far higher than the 15W. This is an indication that this product has a very poor 48% power factor. The electric utility company must deliver the apparent power noted above in order to meet the light bulb’s needs. If the electric meter is recording energy usage as kW, then the utility company is getting shortchanged by the difference between the apparent power supplied, and the true power shown on the meter. In certain energy markets, this shortfall is allocated to all energy users, but in other markets, the shortfall is allocated directly to the individual facilities that have poor power factor in the form of a hefty penalty.


To be fair to fluorescent lighting technologies, quality fluorescent ballasts for general lighting in offices and industrial settings can have a near-perfect power factor, and these “good” types of lighting systems are far more common in commercial and industrial settings than the consumer-grade product cited above. Besides consumer-grade compact fluorescent lighting, other lighting systems that may contribute to poor power factor include magnetic, (or core and coil), fluorescent, metal halide, high-pressure sodium, and other high-intensity discharge ballasts.


In an industrial setting, electric motors contribute to poor overall power factor more than any other facility system. The power factor for motors with similar specifications can vary widely, and power factor for two identical motors will vary widely depending on how far they are physically located from the electrical panel and how they are loaded.

Correcting Poor Power Factor

Adding capacitance (industrial size capacitors) to counter reactance (reactive power) can correct poor power factor on a facility-wide basis. In the above example of the light bulb, the reactive power is 23.2 VAR. Adding an 18.3 VA capacitor to the circuit will bring the power factor to greater than 95%. When these calculations are applied on a facility-wide basis to determine a correctly-sized capacitor system, the end result will be dramatically-reduced energy expenses when a power factor penalty exists or when an electric meter records kVA instead of kW. Contact your SPEP™ representative today to arrange an engineering study to determine how much capacitance should be added to your facility’s electrical system to correct poor power factor. You can also start by sending us a copy of your current utility bill(s) – CLICK HERE

How is Power Factor Corrected?

Power FactorCapacitors consume no electrical energy yet store electrical energy to regenerate into the network. Installation of “SPEP™ Capacitor Banks” may correct the power factor almost to unity thereby reducing the energy demand to the network with very significant savings on the cost of electricity. This translates to a quick return on investment (ROI) in power factor correction systems. Commercial users of electricity are billed according to their peak demand (apparent power measured in kVA), which is usually calculated as the highest average measured over a 15 or 30 minute interval during each billing period as well as the total actual power consumed in the billing period which is measured in kilowatts per hour (kWH). Peak demand (kVA) is generally higher than the peak power consumed (kW) and, unless corrected, is more energy than what is actually required. This causes unnecessary energy wastage and an increase to the required size of electrical generation and distribution systems, resulting in an increase to the overall cost of electricity.

Advantages of Installing a SPEP™ Power Factor Correction Systems

► Immediate and significant savings on your electricity bill
► Improved plant efficiency and longer equipment life
► Increased capacity of the existing system and equipment
► Reduction of load on cables, transformers, switchgear, etc.
► Minimized voltage drops and improved voltage regulation
► Improved starting torque of motors
► Elimination of low power factor penalties
► Reduction on C02 emissions in generating power

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