Global interest in Power Factor Correction (PFC) is increasing for several reasons. Electric utilities are beginning to build reactive power consumption into rate policies, not only just for large industrial customers, but also increasingly for smaller commercial customers.
Also, intensified interest in energy efficiency and reduction of electricity expenses has taken hold in more modestly-sized companies. At the same time, there is a poor general understanding of how to most-effectively counter the consumption of reactive power, and the companies most recently hit by these rate policies, which are ill-equipped to understand exactly how they are being charged (there are at least three ways, some of which are not direct) and how to mitigate their consumption.
In this article, we explain the basics of reactive power consumption, why it is desirable to reduce it, how customers may be charged for it, and the possibility of installing reactive power compensation equipment to reduce those charges. In addition, we briefly explain why reactive power compensation cannot practically reduce the consumption of real power, and thus why it cannot appreciably reduce the portion of a customer bill that is based on energy consumption.
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