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Power Factor Correction: Reduce your electricity costs!

Jan 26, 2022

So, what is power factor correction and how can it help reduce your electricity costs? 

Firstly, let’s explore the concept of power factor, which is defined as the ratio of real power flowing to the load versus the apparent power in the circuit, and is usually shown as a number between 0 and 1. 


Basically, it is the percentage of amps supplied (by an electric utility or other source) that actually performs work in your electrical system. 



The higher the power factor, the more proportion of your supplied power is being used for useful work and the more efficient your site is at utilising the supplied power. 


In summary, power factor is an expression of energy efficiency and a measure of how effectively and efficiently power is being used in your electrical system.

Why is power factor important?


Because, if your system isn’t performing efficiently, you may be paying for power that you cannot use to power your business and equipment. No one wants that! 


Improving your power factor may result in less current being drawn, less heat and greater productivity and longevity for your electrical system. 

So, yes, power factor correction can be extremely beneficial, especially when it comes to reducing the cost of your electricity bill. 

How are you charged for power? 



Traditionally, our electricity has been charged according to a kW (kilowatt) demand tariff which is known as ‘real power’. 


With this approach, you are charged for the electricity you actually use. 


However, in Australia if you are a large demand customer or business you will now be charged according to a kVA (kilovolt-ampere) demand tariff, which is commonly known as ‘apparent power’ (or real power plus reactive power).  You can find the KVA Demand charge on your bill to determine if you are charged in this way. 


Every electrical facility consumes an amount of reactive power. This energy is considered ‘wasted’ as it does not perform useful work. 

Expert Energy Co Power Factor Correction

What's the solution? 



Installing power factor correction equipment, of course. This will help to reduce your peak kVA demand tariff which will result in significant savings in your electricity bill. We all want to save money. We offer both traditional power factor correction units which are a switched capacitor bank, but also work with more modern SVG (Static VAR Generator) Units. Every electricity facility is different so let us determine what works best for your systems. 


But this is just one of many benefits, including: 

  • Significant savings on your power bill – save between 10% and 30% (on average) 
  • Return on investment in 18 to 36 months (approx.) 
  • Reduced burden on infrastructure resulting in less maintenance costs, ongoing servicing or spare parts 
  • Increased load carrying capabilities in existing circuits 
  • Improved voltage 
  • Improved output of large-scale solar PV 
  • Avoid power factor penalties   
  • Reduce demand charges 
  • Reduce power system losses 
  • Corrects lagging and leading PF 

How can Expert Energy help your business with power factor correction equipment?



Expert Energy Co. is your trusted and reliable electrical expert. From power quality and power factor correction, to lightning protection and lighting design, Expert Energy Co. can assist with all things commercial and industrial. 


We are a family business with a passion for the electrical industry, quality workmanship and honest service, and we will happily assess your bill and determine whether you need power factor correction. We will also create a tailored solution for your business to ensure you maximise your return on investment. 


Call us today for a free, no-obligation discussion.

Jayden Expert Energy
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