Power-Factor Correction Demand-Billing Savings

The dollars a power-factor capacitor returns.

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Example

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Checked against published worked examples from: US DOE Motor Challenge (after BPA).

Details, formula, and sources

Scopea low power factor draws more apparent power (kVA) than real power (kW), and where the utility bills demand in kVA (or adds a low-power-factor penalty) correcting it cuts the billed demand every month and releases transformer and feeder capacity. The saving is the kVA reduction times the demand charge, twelve months a year, usually paying the bank back in under a year. Correction has sharply diminishing returns above ~0.9, which is why 0.95, not unity, is the usual target. A billing estimate, not a rate-tariff analysis.

Formula or tablekva_existing = real_power_kw / pf_existing; kva_target = real_power_kw / pf_target; kva_reduction = kva_existing - kva_target; kvar_needed = real_power_kw x (tan(acos(pf_existing)) - tan(acos(pf_target))); annual_usd = kva_reduction x demand_per_kva_mo x 12; payback_years = capacitor_cost > 0 ? capacitor_cost / annual_usd : null.

Source and editionThe power-triangle demand-billing method (kVA = kW / pf, correcting kVAR = kW x (tan(acos pf_old) - tan(acos pf_new)), demand savings = kVA reduction x $/kVA-month x 12), by name; the relations are public.

Free accessThe power triangle and the demand-savings arithmetic are public; capacitor-sizing and PF-billing worksheets are widely published.

What governsEstimate. AHJ and licensed professional govern.

API field namesreal_power_kw, pf_existing, pf_target, demand_per_kva_mo, capacitor_cost, kva_existing, kva_target, kva_reduction, kvar_needed, annual_usd, payback_years

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