Can power factor correction be funded?

Short answer -Yes. In many UK commercial and industrial sites, power factor correction can be installed without upfront capital, with the cost recovered over time from avoided reactive charges and verified savings. This allows a standard, well-established technical solution to proceed without a capital expenditure request and no effect on your bottom line. In principle it diverts cash from the energy company to the solution.

What's changed in acquiring power factor correction? 

On many sites power factor correction has already been identified as a valid improvement, based on clear site data. However, it has repeatedly been deferred because of capital approval, board sign-off, and waiting for the right budget cycle, so the idea tends to be noted and then pushed down the road.

Buying power factor correction has changed.

Today, power factor correction projects are typically structured so that the savings created by removing reactive charges fund the work itself. Instead of paying the utility for inefficiency, that same money is used to fix the cause. That shift in approach is why power factor correction is no longer a “someday” project, it has become a practical, self-funding improvement.

What power factor correction funding actually means and what it doesn't.

• You still use the same standard and proven technology
• You still use the installer or supplier you rely on and trust
• You can set the project in motion with no effect on your bottom line
• It means money you currently pay the energy company for the problem can be diverted to fund the solution.

What funded power factor correction is not

• It's not a grant or government subsidy
• Its not suitable for every site
• It's not new or experimental technology
• It does not demand specialist professionals other than those you know and trust

Eligibility depends on site characteristics and savings potential. A short assessment is always required.

What about my existing engineer or contractor?

Nothing changes. Your existing engineer or electrical contractor remains central to the process and continues to specify and install the equipment in the usual way. This funding model is now widely used, and it is likely that we already work with your contractor or installer. If not, bringing them on board is a straightforward check that can typically be completed within 24 hours, without affecting how the work is delivered.

Why organisations typically choose funding.

Funding is commonly used because it allows projects to move forward without waiting for capital allocation. 

In practice, it:

• Avoids upfront capital expenditure
• Simplifies approval at finance and board level
• Allows projects, and savings to proceed sooner
• Reduces ongoing exposure to reactive charges
• Keeps responsibilities clear between commercial and technical teams

For non-technical decision-makers, this approach provides a practical way to progress the project without requiring any capex commitment. This form of funding for power factor correction projects is a win-win.

What usually happens next

The next step is often an internal review. In many cases, the relevant data already exists, but earlier discussions may have stalled because power factor correction was treated as a capital expenditure project. Looking at the same information again, without that assumption, can change how the issue is viewed. This stage is typically about understanding the problem clearly and bringing technical and financial teams together to reach a decision.

Possible next steps

Discuss the issue with your engineer or contractor.

Your engineer or contractor will usually already have the relevant site data and understand the technical solution. What may be less familiar is the newer approach to funding these installations, where ongoing charges are used to pay for the work.

Review the plain-English guide

If you’re curious about what sits behind the numbers, this short guide provides a plain-English overview of power factor correction. Become a Power Factor Wizard in Your Lunch Hour (PDF) is written for directors, finance teams, and environmental managers who want a general understanding of the topic, without technical depth.

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Note:

Power factor correction sits at the intersection of technical analysis and commercial decision-making. Engineers tend to focus on measurements and system behaviour, while finance and board-level stakeholders focus on risk and cash flow.

We exist to bring those perspectives together. By removing the budget barrier and allowing you to work with the team you already trust, technical insight and financial common sense line up, turning deferred technical projects into straightforward bottom-line savings sooner.