Can you explain power factor without maths?
Short answer - Yes. A simple way to understand power factor is to think of electricity like water flowing through a pipe. If a sponge is stuffed into the pipe, water still flows and the job still gets done, but the system has to work harder to push the same amount through. If two sites are supplied with the same electricity, but one site’s electrical system effectively contains that “sponge”, it creates extra strain on the supply. Reactive charges reflect that inefficiency and energy companies charge you for it.
Power factor correction is the equivalent of removing the sponge from the pipe. Once it is removed, usable power flows more cleanly, without the additional strain or charges, and without changing how the site operates.
Where does the power factor issue come from?
If you look around most commercial or industrial sites, you’ll see a high number of electric motors. These are built into machinery, cooling systems, air handling units, conveyors, pumps, and similar equipment. In most industries, electric motors are simply how work gets done. By their nature, motors need electricity not only to do useful work, but also to create the magnetic fields that allow them to operate. That supporting energy doesn’t drive the motor directly, but it is still drawn from the supply.
This is where terms like reactive power come from. It’s energy that enables equipment to run but does not itself produce useful output. Even so, it still flows through the system and, in many cases, appears as a charge on the electricity bill.
This is the “sponge in the pipe” mentioned earlier. The system still works, but it has to carry extra load to deliver the same result.
Power factor correction removes that sponge. It allows the electrical system to operate more efficiently without changing how the site runs. This is where the savings and benefits come from.
What does good power factor mean?
A good power factor simply means that the inefficiency has been removed.
Nothing changes in day-to-day operations, but the effects can be seen in several ways:
Reactive charges reduce or disappear from the bill
Maximum demand across the site falls
Electrical capacity is freed up
Strain on equipment is reduced
Some of these benefits aren’t immediately visible. What usually is visible is a lower electricity bill, alongside measurable efficiency and carbon improvements.
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.
Share the information internally
If useful, sharing this information with other stakeholders can be a good starting point. Engineering, finance, or board colleagues can review the same content independently using the short link or a printable PDF.
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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.