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How Power Factor Impacts your Energy Saving Plan

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How Does a Lagging Power Factor Affect Your Energy Costs?

When evaluating the performance of a building, the main goal is always to reduce energy consumption and costs wherever possible. However, one aspect that is often overlooked in this process is power factor.

Power factor relates to usage of power drawn into a building, and for large buildings, power factor can be an issue due to usage of motor loads and LED technology. As more and more apparent power is drawn into a building, power factor lagging occurs and the building’s energy usage and energy costs skyrocket, affecting overall energy savings. With this considered, it’s crucial to evaluate opportunities to eliminate lag wherever possible.

So how does an energy manager correct a lagging power factor? In this blog, we – eSight Energy – discuss our recommended tips and outline the basics for understanding electricity usage.


Electricity 101:

Apparent Power – unit of volt-amps which shows the magnitude of power, which is a required power supply to stabilize the circuit

Real Power – unit of watt which is the resistive power consumed by a load(s) in the circuit

Reactive Power – unit of volt-amp reactive where the delta between real and apparent power begin; this is a function of inductance or capacitance that will store energy in the system

Power Factor – non-dimensional percentage which is the ration of real power over apparent power


Correcting a Lagging Power Factor

Power is typically measured in watts, rate of work done, or simply voltage with a current. Utilities may require a minimum power factor percentage or a cap on the reactive power available. The more inductive the load(s), the greater chance for a lagging power factor, which will result in a power factor lower than 100%. The more capacitive the load(s), the greater chance for a leading power factor, which is closer to 100%. 

Capacitors are the simplest device available to correct a lagging power factor and will have a major impact on any energy saving plan. They store energy and reduce the reactive power required to maintain a building’s loads. Capacitors are considered a stop gap since they actually cause power loss in wires or some voltage drop between the supply and the connected load(s). Additionally, equipment such as motors can be loaded incorrectly due to changes in the building’s systems.


Though often overlooked, a lagging power factor can be easily combatted.

Left unmanaged, a lagging power factor can drastically derail any energy saving plan by causing energy usage to increase, resulting in high energy costs. When considering a remedy to this energy waster, it’s essential to identify and eliminate lag wherever possible. Installing capacitors will not only help your building’s systems to store power but also reduce the required reactive power to maintain loads, helping to increase energy savings and reduce costs.

A lagging power factor is just one issue that could be affecting your energy saving plan, but there are many other ways to improve your commercial building’s energy efficiency. Read our eBook for more techniques on how to combat energy wasters.

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