REDUCED DEMAND CHARGES Most electric utility companies charge for maximum metered demand based on either the highest registered demand in kilowatts (KW meter) or a percentage of the highest registered demand in KVA (KVA meter), whichever is greater. If the power factor is low, the percentage of the measured KVA will be significantly greater than the KW demand. Improving the power factor through power factor correction will therefore lower the demand charge, helping to reduce your electricity bill. INCREASED LOAD CARRYING CAPABILITIES IN EXISTING CIRCUITS Loads drawing reactive power also demand reactive current. Installing power factor correction capacitors at the end of existing circuits near the inductive loads reduces the current carried by each circuit. The reduction in current flow resulting from improved power factor may allow the circuit to carry new loads, saving the cost of upgrading the distribution network when extra capacity is required for additional machinery or equipment, saving your company thousands of dollars in unnecessary upgrade costs. In addition, the reduced current flow reduces resistive losses in the circuit. IMPROVED VOLTAGE A lower power factor causes a higher current flow for a given load. As the line current increases, the voltage drop in the conductor increases, which may result in a lower voltage at the equipment. With an improved power factor, the voltage drop in the conductor is reduced, improving the voltage at the equipment. REDUCED POWER SYSTEM LOSSES Although the financial return from conductor loss reduction alone is seldom sufficient to justify the installation of capacitors, it is sometimes an attractive additional benefit; especially in older plants with long feeders or in field pumping operations. System conductor losses are proportional to the current squared and, since the current is reduced in direct proportion to the power factor improvement, the losses are inversely proportional to the square of the power factor. REDUCED CARBON FOOTPRINT By reducing your power system’s demand charge through power factor correction, your company is putting less strain on the electricity grid, therefore reducing its carbon footprint. Over time, this lowered demand on the electricity grid can account for hundreds of tons of reduced carbon production, all thanks to the improvement of your power system’s electrical efficiency via power factor correction