What is Power Factor and Why Should You Care?
How efficiently are you consuming electricity?
If you know your power factor, you would have a good idea of how efficiently you are receiving your power. Power factor is calculated as a ratio; an ideal power factor would sit at 1 or 100%. To determine power factor, the ratio between kW (actual load) and kVA (apparent load–or what is arriving at your location pre-consumption) is taken. Bigger manufacturing and industrial firms often fall victim to lower power factors or “dirty power.”
Why should you care?
There are several reasons it is integral to be aware of power factor. Primarily, electricity providers can tack on tens of thousands of dollars to your electric bill if you have a low power factor. Furthermore, a low power factor means your equipment could be running inefficiently which could cost you quite a bit of money on repair or even replacements. I have seen one particular client being charged over $15,000 a year. That added nearly 25% to their total yearly energy spend.
OK, so what should you do now?
Not everyone has a low power factor. Many companies have installed capacitors to avoid being penalized by providers and to protect their fixed investments. Chances are you should still find out your power factor and have someone discuss your options moving forward. An energy consultant can help you determine whether it is beneficial to you to work on improving your power factor. Usually, these types of services are provided with simple contract procurement. Remember, your energy consultant should be working for YOU.
Feel free to contact us with any questions/concerns!