The Economics of Improving Power Factor

“Will correcting power factor really reduce my electric bill?”

There is no simple answer to this question.  A more in depth understanding of power factor in general, harmonics, the specifics of a facility’s electrical distribution system, and the billing practices of the electrical utility or energy provider (i.e. whether they charge you a power factor penalty or not) is required to properly answer that question.

Assuming that you are charged a power factor penalty, below are suggestions on how to improve your power factor to minimize your power factor penalty.

Improving Power Factor

Adding power factor capacitors is generally the most economical way to improve a facility’s power factor to minimize a power factor penalty. 

While the current through an inductive load lags the voltage, current to a capacitor leads the voltage.  Thus power factor capacitors serve as a leading reactive current generator to counter the lagging reactive current in a system.

This action is explained in terms of the energy stored in capacitors and induction devices.  As the voltage in ac circuits varies sinusoidally, it alternately passes through zero-voltage points and maximum voltage points.  As the voltage passes through zero voltage and starts toward maximum voltage the capacitor stores energy in its electrostatic field, and the induction device gives up energy from its electromagnetic field.  As the voltage passes through a maximum point and starts to decrease, the capacitor gives up energy and the induction device stores energy. 

Thus when a capacitor and an inductor are installed in the same circuit, there is an exchange of magnetizing current between them with the power factor capacitor actually supplying the magnetizing requirements of the induction device. The capacitor thus releases the energy source (the utility) from the need to supply the magnetizing current.

Simply stated, power factor capacitors supply the magnetizing current required by motors at or near the motor site, instead of from the utility (see figure 5).  This frees up utility capacity to provide more real power.

 

Primarily, the cost-effectiveness of power factor correction depends on a utility’s power factor penalties. It is crucial to understand the utility’s rate structure to determine the return on investment to improve power factor.

Maintaining a high power factor in a facility will yield direct savings.  In addition to reducing power factor penalties imposed by some utilities, there may be other economic factors that, when considered in whole, may lead to the addition of power factor correction capacitors that provide a justifiable return on investment. Other savings such as decreased distribution losses, improved voltage reduction, and increased facility current carrying capacity are less obvious but nonetheless real. In addition there are other indirect benefits such as a result of more efficient equipment performance. 

Are you paying a power factor penalty?  Save energy and reduce utility costs by learning more about your utility costs and how they are determined by your utility company.