Can improving Power Factor help your Energy Bill?

***Update – 4/21/09: An Electrical Engineer friend of mine just send me the most detailed technical and economic analysis I’ve seen on the topic of residential power factor correction devices.  Check it out after you read the blog below if you are really interested:  NLCPR: Power Factor correction

Part of our goal with the Mapawatt Blog is to review the best products that can save energy and water in your home.  Product developers know that as energy costs rise, consumer’s budgets get tightened, and people start to care more about their environment (the trifecta of sustainable drivers), those consumers are going to want products that help them save energy.  But do all these products live up to their claims?

One of these products is a power factor correction device and can be seen here.  This product claims:

Residential customers throughout North America could see a realized savings of 8% – 10% typically and as much as 25% on their electrical usage (and thus power bills).

However, I’m not buying it.  There are two great resources on-line that address this same issue.  One is Energy Star and the other is a blogger I’ve been reading for 4 years and has a great section on electricity, Michael Bluejay. Both of these resources say power factor correction really wont help on your residential bill.  It can make a difference for certain industrial users who may be billed by the Utility for peak demand, but this is another story (and it is addressed in the Bluejay article).

To go a little deeper, the formula for Power Factor (PF) is below:

PF = Real Power (Watts) ÷ Apparent Power (VA)

- or -

Watts = PF*Amps*Voltage = PF * Apparent Power

The power factor correction devices are said to improve the second half of the above equation, the Apparent Power.  However you don’t pay your utility for Apparent Power.  You pay them for Real Power (Watts).  Apparent Power is defined as the total power in an AC circuit, both dissipated AND returned! (scroll to the bottom of this link to view the power triangle and description of Apparent, Real and Reactive power).  This means that if you currently have a poor power factor, your  Apparent Power is higher, but all this means is that you are returning more unused electrons to the utility!  But since they only charge you for used electrons (dissipated electrons = Real Power = Watts) you don’t give a hoot about your Apparent Power!

Let’s take an example of 2 completely identical motors sitting side by side.  Both of these motors have the exact same efficiency and operate at 1.2 kW. The first motor doesn’t have a power correcting device.  The second motors does have PF correcting device.

  • Motor 1: 1.2 kW motor, connected to a 120 V circuit, PF = .7
  • Motor 2: 1.2 kW motor, connected to a 120 V circuit, PF = .999 (this has the Power Factor correction device, thus the excellent PF!)

Using the equation above we can show the amps (current) that will be dissipated in motor 1:

1.2 kW = .7 *120V * A → A= 14.29

And we can do the same thing for motor 2:

1.2 kW = .999*120V*A → A=10.01

But this doesn’t mean you’ll pay less to the utility!  All this shows as that your power factor increases (gets better) your amperage decreases, but the Real Power (Watts =  what the utility charges you) stays the same!  Therefore no matter your power factor, in residential settings the utility is still going to show that you took the same amount of Real Power off of the power lines, so that is what you pay.

I would like to see more info from the manufacturers of these devices on how improving PF helps save you Watts!  Basically, your utility doesn’t really care what your Power Factor is, so I want to see some evidence on how this device impacts your energy bill.

One more thing!  On the product’s website there are many customer testimonials.  NEVER believe customer testimonials.  Especially on things like energy saving devices or products that claim they can improve your gas mileage.  The reason people believe these testimonials is because they can’t see electricity flowing through their home, so they just take the product’s statements at face value.  Even if the “customer” really said the things about the product, how do you know they aren’t mentally insane and or compulsive liars?

Also, if your energy bill goes down the month after you install this, how do you know its not just because you didnt have your AC or lights on as much?  You dont! Only believe data and analysis from trusted web sources (Mapawatt, Rocky Mountain Institute, Energy Star, Michael Bluejay, etc.).

I’m not saying this doesn’t work, but I am saying that I need more evidence, and until I see more evidence, I think your and my money can be spent on better energy savings

I’m not the only site questioning the validity of Power Factor correction devices.  Open4Energy has a great review of Power Factor correction devices.  I should note that it is in their “scam” section!

45 comments to Can improving Power Factor help your Energy Bill?

  • Galit Levitin

    Very good point Chris. There is a huge need for educting customers to look for evidence and do some research before jumping on “hot” promisses and spending money!
    BTW do you know http://www.southeastenergy.com ? Sounds like they have something to offer to eligible customers.

  • Thanks for blogging about power factor devices. I got email from a reader who installed one and insists that a specific before/after test (clocking his electric meter) shows a savings with the device active. With all the interest in these devices and the conflicting accounts, I think I need to test one myself. So this summer when I have some time I’m going to buy one of these things, install it, test it, and report the results. If it somehow it turns out they actually work I’ll recommend that people buy them.

    • admin

      Michael, I spoke with an engineer I work with today and he said he has a friend who is an electrical engineer who has one of these devices installed but doesnt really know if it works or not. I’m going to see if I can go run some tests on his house. There is a lot of mystery behind these products! Thanks for the comment. You have an excellent website!

  • According to a utility I spoke to recently, it is correct that they only bill larger customers for VA and households for watts. So improving power factor at home will do little for the electric bill but cause less harmonics (which is good for other reasons) and make utilities lose less.

    However, as utilities are well aware of the usually poor power factor of non-heating home electronics (such as computers, TVs and CFLs), they do include a nominal extra fee into the energy price to compensate for these losses.

    Everyone pays, whether they have poor power factor electronics or not, and I very much doubt utilities will lower this hidden fee for an individual household if it gets a power factor correction device or only uses products that have PF 1 (such as icnandescent lamps, toasters, heaters and stoves).

    Thus I have to agree that this sounds like a rip-off to claim it will lower the energy bill.

  • The only situation I have encountered where power factor correction to the home made sense is this: a geothermal heat pump (the compressor has a low power factor) is powered by an AC inverter (battery bank, wind generator or solar) and requires a very large and expensive inverter. Correcting the power factor from .60 to 1 results in a 40% reduction in the size (VA rating) of the inverter needed. Power consumption has not changed. However, a less expensive power inverter can be chosen, perhaps saving enough cash to pay for the power factor correction unit.

    Aside from very specialized situation like this, the savings from these units is not small. It is zero. Remember that the only savings are from heating losses in the copper wires — not in reductions from power bills. These heating losses are very small.

    I am delighted to see intelligent web sites like this. There is an extreme shortage of decent consumer educational material. Commercial sites are worried about offending advertisers or attracting law suits and are likely to soften their statements and say “we didn’t see any savings but you can try for yourself, or your savings will probably be a few pennies” rather than “This product cannot save you money any more than your car can run on water. If it did, the fundamental laws of physics need to be re-written. Things like 1+1=2 or and water cannot burn”.

    Currently, the only practical ways for most consumers to save money and cut energy costs revolve around using less. The largest for most consumers are in this order: Use the cheapest energy source (natural gas), use less hot water (low flow shower heads). After this, it gets more difficult – add insulation, lower the heat settings, get newer energy saving appliances. The biggest users are heat and hot water. Solar PV and heat would be great if the equipment wasn’t so expensive. It is a complex mess — go to http://www.nlcpr.com/CutEnergyBills.php if you want a good e-book to ponder. I wish there were simple solutions but our current society is based on cheap and limitless energy and zero thought has been put into realistic notions of sustainability leaving us stuck with impractical housing, commuting communities and other absurdities.

    Regards,
    Peter Parsons

  • admin

    Great comment Peter and your site is extremely informative. I agree with you on just about all accounts. I would add one more tip to save money and cut energy costs: get control of your heating and cooling by: actively using a programmable thermostat, rely on ceiling fans when possible, open windows in spring, etc. Basically, do the little things that add up on the biggest energy consumer (heating/cooling) in your household. It just takes a conscious effort.

    We have to be on the lookout for these gimmicks and inform the public before they get suckered in!

  • Devan Sandiford

    Theoretically increasing the power factor does increase the real power of a system. However, to what extent the real power is affected may show up very little in a consumer’s bill.

    If we look at an equation for real power (simplifying it to single phase for illustration purposes), real power equals voltage times current times the power factor: P (Real Power, Watts) = V (Voltage, Volts) x I (Current, Amps) x Power Factor.

    (P = VI * PF)

    So as the equation theoretically illustrates increasing the power factor increase the real power, and thus allows system requirements to decrease. The power factor can also be a contributing factor in fewer losses, because less current is required. The lower the losses of a system the more the source power is reaching the load (the consumer).

    There are more equations into improving the efficiency of a system that are generally already implemented to save the supplier money. It can be really involving, but I agree do a background check on things before purchasing any products that promise savings.

  • I studied for a degree in Electrical and Electronic engineering and while altering the power factor will cause less watts to be read by the meter 1 – it is illegal, 2 – the power companies add up all the consumption on a zone of houses and when it does nto add up they will pay a visit to check that your meter is functioning ‘correctly’ is they see a change in the PF you go to jail for defrauding them – simple enough for you to comprehend. They use the same technique for finding faults in cables without digging up the whole road.

    http://www.nlcpr.com/Deceptions1.php

    • Chip

      If the energy box were to work,why is it illegal? The energy box is installed in the houses breaker panel. Who owns the breaker panel and who owns the electric meter? Thank you in advance for your answer.

  • Paul Pri

    Hello.
    I use Power Factor correction on all of my AC motors. They all in the woodworking shop.They work good, no blown fuses. My high power transformer benefit from Power Factor correction capacitor to, that is in DC router table.
    So what is the problem?
    I know it dos not lower the energy bill but it help my tools run more efficient.
    I have to add that I’m not an electrical engineer- but I can do basic algorithmic calculation to get V and A to 90 degrees as close as possible.
    I someone has a problem with that e-mail me. Paul.

  • Thom

    Hey Paul, you’re right on track. All this self-centered talk about whether or not there is an individual monetary savings does not change the fact that inductive loads run more efficiently with corrected or at least improved power factors. The bottomline is that the amount of fuel required to generate a given amount of power will be less and electric motors and flourescent ballasts will live longer even though the average home owner’s monthly power bill may remain unchanged. Sounds like a worthwhile investment in the environment that should be considered rather than a “rip-off”. Seems kind of a no-brainer to an old hippie like me.

    Incidentally, an improved power factor will lengthen the service lives of a backup power generators for folks like me who occasionally rely on them during power outages after northeast U.S. ice storms. And double incidentally, saving a utility money by using their power more efficiently will not land you in jail. It won’t get you any credit either. It just means that they burn less coal, oil, gas, etc. while you pay the same old bill and relish the satisfafction of knowing that you’re doing what you can to preserve the environment.

    -Thom.

    • Chris

      Thom,
      I think the issue is the cost of these things. They’re like $500. Most consumers dont have an unlimited amount of money to spend on energy conservation. My hole point is that you have $500 to spend, you can make much better energy saving purchases that have a much greater impact on the environment. Like Ecobee thermostats, TED 500s, retrofitting your whole home’s lighting, insulation, etc….

      If they were free then I would highly recommend them, but they’re not and there are much better purchasing options for the consumer out there.

  • Good discussion as always, so have taken to building a list of the different names these “things” are being marketed under, and hopefully reducing their sales.

    http://open4energy.com/forum/home/scam/energy_saving_scams

    It makes me really frustrated, as one dependent on quality advertising to fund the time I spend blogging and etc. – to see I am servings ads from Google for the exact scam I am trying to eliminate.

    On this, there is a new version of the magniwork out there – goes by the name of “Free Power Blueprint” web site is hxxp://www.freepowerblueprint.com/ – and another “Motormagnet” hxxp://motormagnet.com/ – I have to believe they are making sales or how could they pay for the ads on Google.

  • To add a little to the above posting, we are dealing with a lack of understanding of power factor.

    I have written an article explaining why power factor correction does not save consumers any money on the electricity bill.

    In simple terms, electricity suppliers bill consumers for real power, the amount actually consumed and not apparent power which is volts x amps.

    It is true that electricity suppliers need to manage their distribution networks, and that power factor IS one of the factors that impacts their distribution losses. It is also true that large industrial users are charged a penalty for a net power factor of less than 85%. But distribution losses will not be solved by consumers. They are aggregate issues that can only be solved by the utility companies (the smart grid) in partnership with industry and device manufacturers.

  • Tom

    How does one explain the benefits of residential power factor correction with the new Smart meters vs. the older analog meters for measuring kwh?

    http://focus.ti.com/general/docs/litabsmultiplefilelist.tsp?literatureNumber=slaa122

    http://focus.ti.com/docs/solution/folders/print/407.html

    They measure and sense pf differently, and the newer tech also rely on an internal calibration and ‘software CT settings’ that may have been implicated in billing errors when not set correctly…

    A side by side analysis of how these old vs. new digital metering devices and how they measure kwh under various PF and CT conditions and settings would be most enlightening and perhaps clear up some of the misunderstandings ongoing in various utility districts in California…

    Your 2cents/kwr on this appreciated.

  • Jay

    I have worked for an electrical utility for over 35 years, about 1/2 that time as an engineer and the balance in charge of our energy conservation programs.

    Good stuff so far, I won’t touch more on the basics of why it won’t save residential consumers money other than to agree.

    I have dealt with reps from two different companies selling these ‘magic boxes’. After a year of disagreement, one company actually flew their ‘chief engineer’(he never actually mentioned a degree) in to convince me. When I handed him the specifications for how to provide verification of the actual energy savings, he turned to the sales rep and said ‘under this protocol we won’t show any savings’. Mind you they were the same specifications already used to sucessfully demonstrate savings for everything from compact fluorescent lights to insulation to heat pumps.

    The second company never replied.

    Many of these also market a surge protection aspect. If so, ask what UL category they have the device listed in. The ones I have seen list it under Standard 508, which is Motor Controls. The UL standard for Transient Voltage Surge Suppression (TVSS) is 1449. If they list it differently, the surge protection claims are as questionable as the energy savings.

    At this link the FTC settled with a manufaturer over “falsely representing that its transient voltage surge suppressors would save consumers 20 percent on their electric bills…”
    http://www.ftc.gov/opa/predawn/F93/solarsale8.htm

    At this link the FTC sent warning letters to internet marketers “Making Misleading Claims about the Benefits of Gas-Saving and Other Energy-Related Devices…” including Transient Voltage Surge Suppressors – “the Commission and the states have challenged claims that these products provide significant savings for consumers’ energy bills.”

    http://www.ftc.gov/opa/2002/04/energysurf2002.shtm

    This link mentions that the Texas AG “issued a temporary restraining order against…they claimed consumers could plug {the device} into the wall to trim electricity consumption by 25 percent…the legal but rather ineffective devices promise to “fix up” a consumer’s power in some way…He warns potential customers to be leery about energy-saving promises from vendors of products that use capacitors to improve power factor.”

    http://www.countrylines.com/2009/06/30/beware-of-energy-scams/

    • Chris

      Jay,
      You have said it better than I ever could have! I think I’m going to feature an excerpt from this comment along with a list of many of the companies selling these products. The sad thing is, I think a lot of people selling this stuff really believe they are helping people. Others know they are scamming people. Thanks for commenting!

    • Chip

      Hello Jay,
      I am considering selling energy box. I have very no/very little background in electricity. The consensus I get as I do research is that most people do not think the energy box works in residential homes. My question is this: Lets instead of focusing on a box that is designed to save 10% to 25% onyour monthly electricity bill, we have decided to engineer or design scenarios that would cause monthly increase in monthly electricity bill resulting in a increase in bill. Can this be done?,or is electricity just something that is available no no way of improving or decreasing the efficency of the electricity? Thank you in advance for you answer.

  • Dave

    For fun, I emailed a supplier of these devices and asked for their feedback on a site that explained as does your site that for home use it made no difference. Wow. Talk about hostile! The message ended with “Do NOT contact us anymore.” Not what I call good salesmanship. When I started communicating with the people in Australia who market the LUTEC electricity amplifier, I was called a STUPID DONKEY because I did not accept their claims. I think it is great that sites like yours are there for checking before going further. I always do an internet search for ” . . . scam” or “. . . problem” about any product that sounds too good to be true.

  • You don’t have to ask for any more evidences.
    Compensating reactive power at the load won’t lower your bill, as they explain on
    SmartGridElectronics.

  • Chandler

    I distribute these power factor correction devices. We guarantee they will lower your bill 10%. We know everyones bill will not drop 10%, but we also know that most peoples bill will. In our mind it was worth the risk to help boost the consumer confidence. If you are pondering these devices check our site out, order one, if you dont save 10% I personally will refund your money. All of our guarantees are in writing with real signatures and are included with every unit we ship. They can be printed off of our site as well. We look forward to the opportunity to show you what these devices can do. FYI I have also sent Michael Bluejay an email offering the same for him, hopefully he will give it a shot.

    • Chris

      Chandler,
      I approved your comment but I dont believe in your product; nor would I ever recommend that people should buy it.

      Can you please explain to Mapawatt readers how, in technical terms, your products saves them money on their energy bill even though the utility doesn’t penalize for a bad power factor?

      Also, how can people actually prove that the bill drops 10% considering temperature fluctuations month-month would make that impossible to show?

    • Chris

      Chandler, I watched your video, but you don’t show how users will save money on their energy bills. All you show is amps dropping…but that doesn’t prove anything, because while the amps are dropping, the PF is increasing and kWh (what the utility cares about) stays the same!!!

      In the YouTube video on your site you say, “The Amperage is what you are paying for.” This is wrong. You are not paying for the amperage, you are paying for the cumulative power!

      It sounds like you need to re-read my article to understand some of the equations above….

      • Chris,
        Answer these questions. Does unity is an electrical system improve it or not? If you reduce current draw ( amps) on a conductor does it use kw faster or slower? If I have a PF of .70 at 14 amps , improve it to PF of .99 at 10 amps which is more efficent?

        • Chris

          Liston,
          I don’t understand all of your questions. On the last one, you are definitely more efficient at a higher power factor, but again, the utility isnt charging for efficiency, only kWh used. You’re right that improving PF helps greatly in an industrial setting, but that is totally different than a residential setting.

  • irwan

    Believe or not it is up to you all. I had no doubt on this and it really work and reduce my monthly bill for at least 10%. And i even built it myself to compare it with the one i bought. It does the same, my current flowing to my house dropped from 4.6 to 3.8 amps. Wow..it does save my bill on the next coming months. It just really simple, i’ve collected some capacitors from my workplace scrap centre then make a parallel connection and directly connect to wall socket and it does the job. Its worthy..not talking for those mentioned company but i see and did it myself. Anyone with electrical background will not object on this. Theres a theory and how to solve low p.f.

  • irwan

    One more thing, it will only work if your house mostly using inductive load(coil based) such as fluorescent light using choke, motors on washing machine, refrigerator and so on. What it do is to minimize the angle of current and voltage. Which is known that most of inductive load will tend to make current lags behind voltage. But if the circuit is capacitive, the current will lead the voltage. That is why we used capacitor to correct the angle and reduce amperage. 10% does make a lot of saving if in term of one year. Just my 2 cents…

  • Hey,
    Ralph sounds like someone is brainwashing you about the legality of installing power factoring equipment.I agree residential systems might not see much of a savings. I test and install PF equipment in the industrial environment. It works! By the way what makes a meter spin or count kWhrs. I think its more than just PF and voltage. Current has to flow. Which spins the meter faster a load of 14 amps or a load of 10 amps ( eariler example)

  • Chip

    I am considering selling energy box. I have very no/very little background in electricity. The consensus I get as I do research is that most people do not think the energy box works in residential homes. My question is this: Lets instead of focusing on a box that is designed to save 10% to 25% on your monthly electricity bill, we have decided to engineer or design scenarios that would cause monthly increase in monthly electricity bill resulting in a increase in bill. Can this be done?,or is electricity just something that is available with no way of improving or decreasing the efficency, the cost of the electricity? Thank you in advance for you answer.

  • Tim

    can someone tell me how my electric meter calculates or reads my power factor?

    • Chris

      It’s easy. Your electric meter doesn’t care about power factor.

      • Paul

        I once saw a KVAR being demonstrated. He had a 1/4hp split phase motor, an actual electric meter, and the KVAR unit.

        Also was a switch that run the motor either with or without the KVAR. It was obvious that the meter ran slower with the KVAR switched in. All wires were out in the open to see.

        You said the meter doesn’t care about PF. Has this been verified in reality? Ralph above said the meter ran slower, and that’s what it’s all about, not theroy. Granted the potential savings is small.

  • Daniel Mann

    There seems to be so much confusion about the use of power factor correction capacitors and savings for the residential customer. As a graduate electrical engineer, I practiced my profession for over 40 years, many of which involved the use and billing of electrical energy. I was a registered professional engineer in the states of Oklahoma and Texas.
    The use of power factor correction in the home, the savings will be miniscule, once you take the savings with a reduction of the I squared R losses in the house wiring less the capacitor losses(yes they ALL have losses). In measuring the power consumed by an electric motor with and without power factor correction, I was able to detect zero difference. I performed this and documented the results in order to dispell the claims made to me in about the year of 1995.
    Now, when it comes to some commercial and all industrial users, there are some great potentials for savings by correcting the power factor because the commercial and industrial electric rates are structured to penalize the customer for low power factor. Some power companies base their demand charge on KVA rather than KW with a penalty for power factor below some cutoff number. I have analyzed hundreds of electric rates all across the US.

  • Ron Vierra

    I have a little twist on the residential use of a PFC. I have three phase power and it saves me plenty. I also added one in my machine shop,which includes wire EDMs, ,sinker edms, cnc mills etc,..And I enjoy a great savings. The numbers speak for themselves for more than a year.
    Thank You

  • Rob Stork

    I need help with the energy balance. Neglecting losses, I believe utility company gernerators produce VA-h energy which is equivalent to a given quanity of coal. Am I correct here? If so, consider the following:
    If an inductive laod with a pf of 0.7 requires 1 VA-h to do 0.7 Watt-h of work and 1 VA-h requires X lb of coal to be burned, but 0.7 Watt-h requires 0.7 X lb. of caol, where did the 0.3 lb of coal go?

    • Chris

      Rob, the amount of coal burned is going to be the same if you are producing the same qty of VA-h. In the case of poor power factor, .3 lb is burned and the electrons it created (through the turbines) that are not converted to useful energy (watts) are left on the line waiting to be used. Improving power factor just means you are more efficient in transporting electrons to do useful work.

  • Rob Stork

    Chris,
    Thanks. So if a motor load is say 10 watt (real power) and the PF results in 15 VA (total power)then the utility burns the amount of coal to produce 10 watt and not 15 VA. If this is true then the utility only burns coal to statisfy the real power watt demand regardless of PF and resultant VA, neglecting losses? Right?

    • Chris

      Not necessarily. The utility has to create all 15 VA, but only 10 watts is used. That means the other electrons are still floating on the line waiting to be used up. This is why utilities punish industrial plants with poor PF. The utility has to create the power (thus meaning they have to activate assets like peaking natural gas plants) to supply power to the industrial user, but because the industrial user has a poor PF not all the power is being used. Note that no energy is wasted, the only thing that is wasted is the utilities time and effort to actuate the plants that could be idle if PF was better.

  • Rob Stork

    Chris,
    So there is no savings in energy (coal, n.g., etc) that can be quantified by increasing the PF of a given load. The only “savings” is not having to bring additional generation on line to provide the additional current required for the higher amount of VA associated with a lower PF and this “savings” does not translate to energy consumed by this given load. Am I getting there?

  • b.v.chandrashekar

    Sir
    In all power factor improvement articles, the efficiency(watt loss/kvar) of compensating device is not taken into account. What if the compensating device consumes more energy than it can save upstream?

  • Ed Graves Radiant Barrier

    I was under the impression that these type of products could save money if the correct sized unit were installed?

    • Chris

      Ed,
      What does it matter if they’re sized right? The utility doesn’t punish for poor power factor so it’s irrelevant! Until someone can show me that these power factor correction devices save energy based on electrical principles, I can’t recommend them.

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