What is Power Factor Correction?

October 15, 2024

Power Factor Correction (PFC) is essential for maintaining efficiency and performance in electrical systems. It involves adjusting the relationship between real and reactive power to achieve a better balance. 


PFC is a cost-effective method to ensure that the power supplied by the grid is used efficiently, reducing energy costs and increasing productivity.

modular power factor correction by quality energy

PFC equipment enhances the efficiency of electrical systems by improving the ratio of real power to apparent power.


Real power, measured in kilowatts (kW), represents the actual power consumed that directly contributes to the operation of your machinery. Apparent power, measured in kilo volt-amperes (kVA), captures the total power input to your equipment. 


Power factor should be close to 1. In industrial applications, where power demands are significant, even a slight deviation from the ideal power factor can result in substantial energy losses and unnecessary expenses.


Improving the power factor raises this ratio and brings it closer to 1, while ensuring the voltage supplied aligns with the needs of the equipment.

Types of Power Factors

Here's a breakdown of the different power factors and their implications:


  • Good Power Factor: A good power factor means your electrical power operates efficiently. The power factor is close to 1, indicating that the apparent power closely matches the real power, with little energy wasted. Typically, a range of 0.95 to 1 is considered good. 
  • Poor Power Factor: When the power factor is well below 1, it indicates poor power system efficiency. The apparent power is likely exceeding the real power, leading to excessive energy consumption and wasted electricity. A poor power factor could be as low as 0.5 or even lower. 
  • Lagging Power Factor: This type of power factor occurs when the reactive power phase lags the active power phase. It is common in inductive loads, such as motors and transformers. A lagging power factor is a significant indicator of potential inefficiencies and wasted energy.
  • Leading Power Factor: A leading power factor is seen in capacitive loads. This happens when the phase of reactive power leads the phase of active power. While it might indicate some energy-saving beneficial equipment, a high leading power factor could also imply the presence of excessive capacitance in the system.

Power Factor Correction Across Industries

power factor correction australia

PFC is valuable across a range of industries, and the team at Quality Energy is experienced across many, including:


Manufacturing and Industrial Sector: Improved power factor helps reduce energy costs and enhance the overall productivity of large-scale manufacturing processes. Read how we helped Austech Wire and Cable achieve a power factor of 0.99. 


Commercial Buildings: Commercial real estate, including office complexes, shopping centres, and large retail spaces, often use PFC to decrease energy consumption, improve building efficiency, and potentially enhance the value of their properties. We helped Rialto in Melbourne City resolve large current surges and tripped circuits, increasing their power factor to 0.98. Read the case study here.


Renewable Energy: Wind and solar power generation often exhibit varying power factors. PFC equipment helps maintain a consistent power factor, improving overall efficiency and grid integration. Read our case study to learn how we helped Arctic Ice save more than $18,000 in power bills in the first year.


Healthcare: Australian hospitals and medical facilities rely on PFC to ensure stable and efficient operation of critical medical equipment. This is particularly important for regional and rural healthcare facilities where power quality can be inconsistent. 


Agriculture and Mining: For large-scale farming operations, it helps improve the efficiency of irrigation systems and processing facilities. In the mining sector, PFC is vital for operating heavy machinery, conveyor systems, and processing plants, often located in remote areas where power quality can be challenging. 


Data Centres: Data storage and processing facilities consume significant amounts of electrical power. PFC ensures the servers and IT equipment operate efficiently, reducing energy costs and cooling requirements.


Automotive Industry: The automotive sector, including electric vehicle (EV) manufacturing, relies on PFC to enhance the efficiency of battery charging processes and overall vehicle electrical systems.


HVAC (Heating, Ventilation, and Air Conditioning): PFC is used in large-scale HVAC systems to maximise the performance of heating and cooling equipment. 


Lighting Industry: PFC reduces the reactive power associated with lighting systems in outdoor lighting such as streetlights and signage. 


Electronics Manufacturing: Some consumer electronics and semiconductor manufacturing processes require precise power factors for consistent and efficient operation. 


Marine and Aviation Sectors: PFC is relevant in marine engineering and aviation, especially in large vessels and aircraft that demand stable and efficient power systems. 

Benefits of Power Factor Correction

Power factor correction offers numerous advantages, making it an essential practice for maintaining a healthy and efficient electrical infrastructure. Key benefits include:


  • Improved Efficiency: By balancing the relationship between real and reactive power, PFC ensures that the incoming power is used more efficiently. This leads to reduced energy consumption, as more of the supplied power is directed to the actual workload, thereby improving the overall efficiency.
  • Cost Savings: Energy bills are based on the total apparent power (kVA) consumed, not just the amount of real power (watts). Correcting the power factor can significantly reduce your energy demand costs. 
  • Reduced Power Losses: Poor power factor can lead to excessive reactive power flow, causing unnecessary losses. Power Factor Correction helps mitigate these losses.
  • Enhanced Equipment Performance: With a corrected power factor, the actual power (watts) required by the equipment is better aligned with the supplied power, ensuring optimal functionality and potentially increasing the lifespan of your machines.
  • Increased Reserve Capacity: Correcting power factor can lead to a more efficient system, providing additional reserve capacity. It gives you a safer buffer for adding more equipment or increasing production without overloading.
  • Energy Efficiency: By minimising wasted power, your facility can reach a new level of green efficiency, reducing the overall environmental impact of energy consumption.

Assess Your Power Factor

A power quality audit makes assessing your power factor straightforward. At Quality Energy, our team of expert analysts is ready to provide you with invaluable insights into your system's performance.


By scheduling an audit, you'll gain:


  • Precise identification of power factor or other power quality issues
  • Tailored recommendations for practical solutions
  • In-depth analysis using state-of-the-art equipment
  • Clear understanding of your maximum demand and minimum power factor requirements

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How to Improve Power Factor

There are several ways to improve power factor, including: 


  • Capacitor Banks: For larger systems with significant reactive power demands, a PFC unit with capacitor banks should be customised, manufactured and installed. These banks are designed to counteract the reactive power load, bringing the power factor closer to 1. Capacitor banks are configured for constant or variable correction depending on the system's needs. 
  • Active Power Factor Correction: In some cases, installing a dedicated power factor correction unit could be beneficial. These units, often called Static Var Generators, Statcom or active PFC, sense the reactive power in the system and inject the necessary corrective amount of reactive power. They are used in high-power applications where the reactive power demand varies significantly.
  • Capacitors: Another method is to get individual capacitors installed. Capacitors act as a buffer to balance the reactive power in the system. They can be connected either in parallel or series. Parallel connection is used for general PFC while series connection is more suitable for specific applications. 

When to Install PFC Equipment

Here are some key indicators that your system could benefit from power factor correction:


  • If you have a kVA charge present on your electricity bill. Our blog post on understanding kVA charges will help you identify this.
  • Low Power Factor: If your power factor persists (typically below 0.9), it's time to consider correction. A lagging power factor of 0.8 or lower significantly indicates power factor correction is required.
  • High Apparent Power: If the apparent power (kVA) is considerably higher than the real power (kW) consumed, it clearly shows low power factor and energy inefficiency. In such cases, power factor correction becomes a valuable solution.
  • If you’re running close to your electrical system’s capacity and wish to install more equipment, PFC could eliminate the need to upgrade the site’s electrical infrastructure.
  • Power Factor Mandates: In Australia, power factor requirements are governed by national, state, and distributor-specific regulations. Large commercial and industrial customers are generally required to maintain a power factor of 0.8 or higher. Failure to meet these standards can result in penalties for non-compliance and could even risk the electricity distributor isolating your power supply.

Choosing the Right Solution

front view of a power factor correction system

Choosing the right solution for your facility can be overwhelming, but that's where the experts at Quality Energy come in. Our electrical engineers and power quality specialists assess your needs and recommend the most suitable power quality equipment, which may include PFC.


To design a customised solution, we consider the type of load, system configuration, available space, and budget.


Here are some additional considerations:


  • Type of Load: Inductive loads, standard in motors and transformers, often require different correction methods than capacitive loads in electric furnaces or LED lighting.
  • System Harmony: We ensure the recommended solutions integrate seamlessly with your existing electrical system. Compatibility issues can lead to unexpected problems. 
  • Installation and Maintenance: Quality Energy designs, installs, services, and can monitor power factor correction equipment, ensuring your system runs efficiently. 
  • Cost-Effectiveness: Our experts can build systems that provide significant long term cost savings and the highest return on investment, and can be added to as demands change. 

Talk to Quality Energy Today About Power Factor Correction



Power factor correction is a vital aspect of modern electrical system management. With the right solution, you can significantly improve your energy efficiency, reduce electricity demand and costs, and ensure a more sustainable and green future for your business. 


Take a proactive approach to enhance the operational effectiveness of your business today. Reach out to our team to discuss a power quality audit and find out how we can help improve your power factor. It's a valuable investment for businesses striving for efficient and responsible energy usage.

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