What is power factor correction?

Three kinds of power: real, reactive and apparent

Alternating current circuits deal with three related quantities. Real power, measured in kilowatts (kW), is the power that actually does work — spinning a motor, heating an element, lighting a bulb. Reactive power, measured in kilovolt-amps-reactive (kVAR), is power that oscillates back and forth to build and collapse the magnetic fields inside motors, transformers and other coils; it does no net work but still requires current to flow.

Apparent power, measured in kilovolt-amps (kVA), is the combination of the two — it is what the wiring and generation equipment actually have to supply and carry, regardless of how much of it is 'useful'.

The power triangle

Engineers visualize the relationship as a right triangle: real power (kW) along the bottom, reactive power (kVAR) along the vertical side, and apparent power (kVA) as the hypotenuse connecting them. The angle between real power and apparent power represents how much the current and voltage waveforms are out of phase.

Power factor is simply the ratio of real power to apparent power (kW ÷ kVA), expressed as a number between 0 and 1 (or 0% to 100%). A power factor of 1.0 means all the apparent power is doing useful work. A power factor of 0.7 means a large share of the current flowing is reactive rather than productive.

Why inductive loads lower power factor

Motors, compressors, pumps, fluorescent ballasts and transformers are 'inductive' loads: their coils store energy in magnetic fields and hand it back to the circuit each cycle. That back-and-forth exchange is the reactive current described above. The more inductive load running relative to resistive load (heaters, incandescent bulbs, ovens), the lower the overall power factor of a circuit or facility.

Why industrial and commercial customers pay power-factor penalties

Utilities size generators, transformers and distribution wiring to handle apparent power (kVA), not just real power (kW). A factory with a poor power factor forces the utility to provision extra capacity it is not being paid for in kWh billing. To recover that cost, utilities commonly meter demand in kVA or add a power-factor penalty clause to commercial and industrial contracts, sometimes billing based on kVA demand or applying a surcharge below a target power factor such as 0.90 or 0.95.

Large facilities install banks of power-factor correction capacitors at their main switchboard specifically to avoid these penalties and to reduce the load on their own internal wiring and transformers.

Why residential customers usually do not pay these penalties

In the United States, standard residential electric meters measure and bill real power in kilowatt-hours (kWh). They generally do not meter kVA or apply power-factor penalties to homeowners. This is a key structural difference from industrial billing, and it is the main reason a homeowner cannot expect the same dollar outcome from power-factor correction that a factory does.

Where a plug-in correction device can and cannot help at home

• Can help: reduce the total current flowing through in-home wiring when large motor loads are running, which can slightly lower resistive (I²R) losses and heat in that wiring.
• Can help: improve power factor locally at the outlet for the appliances nearest the unit.
• Cannot help: change what your utility meter records, since it measures real energy delivered, not reactive power.
• Cannot help: reduce consumption from purely resistive loads like electric ovens, water heaters or incandescent lighting, which already have a power factor near 1.0.

How this applies to StopWatt

StopWatt is a plug-in capacitor-based power-factor correction unit built for 90V–250V household outlets. It works on the same underlying principle used in industrial capacitor banks, scaled down for residential circuits. Because residential billing does not include a power-factor penalty, any benefit shows up only through the smaller mechanism of reduced in-home wiring losses — not through a direct reactive-power charge disappearing from your bill.

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