Inefficient electrical systems tend to use a large quantity of ‘reactive’ power (kVAr), which represents the power lost in the operation of inductive equipment such as transformers. This invariably increases the total power load represented by your kVA –and reduces your overall energy efficiency or ‘power factor’.
The power factor calculation is the ratio between your kVA, or total power load, and your kW, or the actual power working for your business. Power factor is measured on a scale between zero and one, with 1.0 representing optimal energy efficiency. The higher the power factor is, the more efficient your site is at utilising the supplied power. Businesses with a low power factor may encounter higher capital expenditures and operating costs for the electricity network. These costs usually have to be passed on to customers as higher tariff rates.