The power factor of an AC electrical power system is defined as the ratio of the real power flowing to the load to the apparent power in the circuit. Power factor is low in industrial settings where most of the plant energy is used to power electric motors. It is lowest when the induction motors tend to be oversized and under-loaded. A lagging (less than 1.0) power factor causes some additional energy loss because more current is required – compared to an in-phase sinusoidal current – to deliver a certain amount of power. Power factor correction means implementing a capacitor in parallel to the circuit in order to correct the lagging (inductive) load.
Interested in the math? Below is a quick example of power factor correction calculations.