Power factor is the ratio of true power (or active power KW) consumed by a load to the apparent power (KVA - which is the product of voltage and current) drawn by the load.
 Before and after Power Factor Correction (PFC)
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From the view point of both LT as well as HT industrial consumers, to reduce losses, optimise ratings of equipment and cables, reduce voltage drop, minimise expenditure on regulatory equipment and also to minimise monthly electricity bills, power factor of the order of 0.9 or higher is necessary.
Capacitors are connected in a circuit across the load (shunt) to reduce the demand of reactive power and thereby increase power factor of the whole electrical system.
Capacitors are connected in a circuit across the load (shunt) to reduce the demand of reactive power and thereby increase power factor of the whole electrical system.
Lastly, TNB levies a penalty for low power factor, the following is an excerpt from the TNB Tariff Book.
For all Tariffs, except Tariffs A and G, the consumer shall use his best endeavours to obtain the highest Power Factor possible in the operation of any of his electrical installations. If the Average Power Factor in any month is found to be:
- Below 0.85 and up to 0.75 lagging, a supplementary charge of one and one-half per cent (1½%) of the bill for that month for each one-hundredth part (0.01) below 0.85 and up to 0.75 lagging Power Factor will be added to the bill for that month, and
- Below 0.75 lagging, in addition to the charge payable under subparagraph (A) above, a supplementary charge of three per cent (3%) of the bill for that month for each one-hundredth (0.01) part below 0.75 lagging Power Factor will be added to the bill for that month.
Example: A Consumer has a Power Factor at 0.60 and his consumption is RM4,800.00
| (a) | 0.85 - 0.75 = 1½% x 10 units lagging = 15% |
| (b) | 0.75 - 0.60 = 3% x 15 unit lagging = 45% Total extra levied = 60% |
The total payable will hence be RM 7,680.00