Leading and lagging, and why the meter cares

On a resistive load, volts and amps rise and fall together and power is simply one times the other. Put a motor on the line and they fall out of step. The current is still there, the supply still carries it, but some of it is no longer doing work.

Power factor is the number that describes how far out of step they are.

One triangle

• Real power, in kW — what actually turns the shaft or makes the heat. What you are buying.
• Reactive power, in kVAR — energy that sloshes into magnetic or electric fields and back out. It does no net work.
• Apparent power, in kVA — the vector sum. What the conductors, transformer and supply have to carry.

Power factor is real divided by apparent power. Where the current is a clean sine wave — motors, transformers, ballasts — that equals the cosine of the angle in the triangle. Add drives and electronic loads and the current comes back distorted, so the true power factor is lower than the cosine suggests, and capacitors do nothing about that part of it. At a power factor of 1 the triangle collapses to a line and every amp is working. At 0.8 you are moving 25 percent more current than the work requires.

Lagging is the one you will meet

Anything with a winding — motors, transformers, ballasts, welders — stores energy in a magnetic field. Inductive loads make current lag behind voltage, and that is a lagging power factor. It is the normal condition of nearly every industrial and commercial installation.

Capacitive loads do the opposite: current leads voltage. Leading power factor is rarer, and on most sites it shows up as a symptom rather than a condition — correction capacitors left in circuit when the motor load they were sized for has dropped off.

Why it mattersA useful mnemonic: in an inductor, current lags. ELI the ICE man — voltage (E) leads current (I) in an inductor (L), current leads voltage in a capacitor (C).

Why the utility bills for it

The utility has to build and maintain conductors, transformers and switchgear sized for the apparent power, not the real power. A site drawing 800 kW at 0.8 power factor needs 1,000 kVA of capacity. The same site at 0.95 needs about 842.

That spare capacity costs the utility money and earns nothing, so many larger commercial and industrial tariffs either bill demand in kVA or apply a penalty below a threshold power factor, while smaller general-service rates often carry no power factor provision at all. The exact threshold and the way it is charged vary by utility and by tariff, so the number that matters is the one on your own rate schedule.

Power factor correction is one of the few electrical improvements that can pay for itself out of the bill rather than out of avoided failure — but only if your tariff actually has a kVA or power factor clause. On a plain kW-and-kWh rate it saves you very little. Read the rate schedule before sizing anything.

Correcting it, and over-correcting it

Lagging power factor is corrected by adding capacitance, which supplies the reactive power locally instead of dragging it across the utility's network. Capacitor banks at the service, or at individual large motors, are the usual answer.

The trap is that load varies and fixed capacitors do not. A bank sized for a full production shift is oversized at night and on weekends, and the site swings from lagging to leading.

• Leading power factor can push voltage up at light load, which is hard on everything connected.
• If demand is billed in kVA, leading is penalized automatically — kVA exceeds kW whichever way the angle leans. On a threshold clause it depends on how that clause is written, so read it.
• Capacitors switched with the load they correct, or an automatic bank that steps with demand, avoid both.

Three things about capacitors that are not optional

• A capacitor on the load side of a motor starter has to stay below the motor's no-load magnetizing current. Oversize it and a coasting motor self-excites — it becomes a generator and swings damaging overvoltage after the starter opens.
• They never go on the output of a variable frequency drive. It damages the drive, the capacitors, or both.
• They hold a lethal charge after disconnection. Respect the discharge time before anyone touches a terminal.

One more on reliability rather than safety: on a service with significant harmonics a plain bank can resonate with the source impedance and fail. That is what detuned banks, with a reactor in series, exist for.

Which is why the useful question is not "what is our power factor" but "what is it at each of the loads we actually run". A single reading at peak tells you very little about the rest of the week.

The short version

• Power factor is real power ÷ apparent power, the cosine of the angle in the triangle.
• Inductive loads lag. Nearly every site is lagging, and motors are why.
• Capacitive loads lead. Leading usually means correction left in at light load.
• The utility sizes for apparent power, which is why it bills for the difference.
• Over-correction raises voltage and can be penalized too. Switch capacitors with the load.

This guide is general information to help you check your work. It is not legal advice or an official inspection, and it does not replace the requirements that apply to you, the manufacturer’s instructions, or a determination by an inspector or the authority having jurisdiction. Requirements vary by location and change over time; check the current rules where you work.