Power Factor Correction

You may be able to claim up to $41/kVAr for power factor correction by reducing the amount of power your business draws from the network at your peak time. This could add up to thousands of dollars in rewards!

What is Power Factor?

Power Factor is the relationship between Real power and Apparent power. Apparent power is your total usage and is made up of Real power which is the part that does the work and Reactive power which is required by AC systems to operate. Reactive power contributes to your electricity bill but is not used.

A simple way to show this is with a cappuccino, the coffee and the froth are needed but the coffee is what does the work, so you want more of the coffee and less of the froth.

Power factor correction explained using a cappuccino diagram. Froth is the reactive power kVAr, coffee is the Real power kW and the whole cappuccino is the Apparent power.

Some other info:

  • Your power factor is measured by a number 0 - 1, the closer to 1 the more efficient your system is (using more real power than reactive power)
  • If your electricity bill shows demand tariff charges you can reduce your reactive power by installing Power Factor Correction (PFC) equipment, a small change in your power factor can make large changes to your electricity bill
  • Power factor equipment installation may be the cheaper option over upgrading, retrofitting or buying new equipment such as electrical cables
  • If your power factor is below 0.8 you should consider PFC equipment, it is readily available and will often have a payback period less than other energy efficiency solutions - check our list of suppliers.

How can we assist?

When you improve your power factor number closer to 1 you are minimising the amount of strain on the electricity network, this is why we offer funding to eligible businesses who wish to reduce the amount of energy they demand from the grid.

Check to see if you are eligible for power factor correction Business Rewards.