Power factor correction — basics every facility manager must know
Automation & IoT · 7 min read · Updated 2026-03-28
TL;DR
Power factor (PF) = real power (kW) ÷ apparent power (kVA). Below 0.90, utilities impose penalties. APFC (Automatic Power Factor Correction) panels with capacitor banks keep PF near unity. IoT meters measure PF live and confirm savings.
Why power factor matters on your bill
Many Indian utilities bill commercial and industrial consumers in kVAh, not kWh. If your PF is 0.80, you pay 20% more for the same real energy consumed. Correct PF to 0.98 and you eliminate that surcharge.
How to improve PF
- —Install APFC panels with staged capacitor banks.
- —Use detuned filters if harmonics are present (VFD-heavy loads).
- —Right-size motors and turn off oversized idling equipment.
- —Correlate PF with load using an IoT three-phase meter.
Frequently asked questions
What PF qualifies for a rebate vs a penalty?
Most state DISCOMs give a rebate at PF > 0.95 and a penalty at PF < 0.90. Check your tariff for exact thresholds.
Do I need separate capacitor banks for each feeder?
Large facilities typically use centralised APFC. Feeder-level correction is used where long cable runs cause PF drift at the load.