Will the power factor correction reduce my electricity bill ?

Question

I have some inductive loads(Motors) in my small factory and i'm now concentrating on correcting the power factor in order to reduce my electricity bill. can someone please tell me will it work for me.

Answer 1

Residential and small commercial customers are usually billed only for kilowatt-hours not for the reactive current that is responsible for low power factor. However, as a factory owner, you should not assume that you are not paying for low power factor. You need to find out for yourself. Look at your bill. Make sure that the major item on your bill is labeled kilowatt-hours (kWh). If there are items labeled "surcharge," "adjustment," or penalty, find out what they are. Call your utility company.

Answer 2

You need to sort this out with your power supplier. They may penalize for low power factor but usually only large customers so its very unlikely.

The losses are a little higher than need be if your power factor is low but this would be unlikely to be sufficient to justify the cost of power factor correction.

You may save more money by considering high efficiency motors especially if any motors you have are near the end of their life.

Answer 3

No. You are billed for power, not VA. Power factor correction reduces the VA, but that is not what you are billed for. The utility company will save on distribution costs, so you may be able to negotiate some kind of a deal with them, but I am not holding my breath.

Usually the utility company does power factor correction, not the end user.