Power factor correction explained for UK buildings

Facilities managers and business leaders across the UK face growing pressure to reduce energy costs, improve operational efficiency and demonstrate measurable progress against sustainability targets. While investments in LED lighting, smart HVAC controls and building automation are now commonplace, one major source of electrical inefficiency often remains hidden in plain sight. That inefficiency is poor power factor.

Power factor correction improves how effectively electricity is used within a building by reducing wasted reactive power. When power factor is low, electrical systems draw more current than necessary, increasing energy charges, placing strain on infrastructure and shortening the lifespan of critical assets. Power factor correction addresses this imbalance, helping organisations cut avoidable costs and operate more efficiently without increasing consumption.

Power factor basics

To understand power factor correction, it helps to understand how electrical power behaves within a building.

Electrical power is made up of three components.
Real power measured in kilowatts is the energy that performs useful work such as lighting spaces, driving motors or powering IT equipment.
Reactive power measured in kilovolt ampere reactive supports the operation of inductive equipment by maintaining magnetic fields but does not perform productive work.
Apparent power measured in kilovolt amperes is the total power supplied to the system and includes both real and reactive components.

Power factor is the ratio of real power to apparent power and is expressed as a value between zero and one. A power factor close to one indicates efficient electrical use, while a lower value signals wasted energy and unnecessary system loading.

Why power factor matters

Poor power factor has a direct and indirect impact on building performance. When reactive power demand is high, electrical systems must carry additional current to deliver the same amount of useful energy. This increases losses within cables and transformers, raises operating temperatures and accelerates wear on electrical components.

For commercial and industrial buildings, poor power factor often results in higher electricity bills, reduced available capacity and increased maintenance costs. In the UK, where many utility providers apply penalties or excess capacity charges for low power factor, inefficiency becomes a financial risk rather than just a technical issue.

What is power factor correction

Power factor correction is the process of improving the ratio between real and apparent power by compensating for excess reactive power. This is typically achieved by installing capacitors or intelligent control systems that supply reactive power locally, reducing the burden placed on the electricity supply.

Electricity is not just one single flow of power. It is made up of three parts.

Real power (kW) is the portion of energy that performs useful work such as lighting rooms, running motors or generating heat.

Reactive power (kVAR) is the portion that supports equipment by maintaining the magnetic fields needed for operation. While essential, it does not perform useful work.

Apparent power (kVA) is the combination of real and reactive power.

The power factor is the ratio of real power to apparent power. It is expressed as a number between 0 and 1. A power factor of 1 represents full efficiency, with every unit of electricity being used productively. A value below 1 shows that some energy is being wasted.

Power factor correction is the process of improving this ratio. It usually involves installing equipment, most commonly capacitors that reduce the demand for reactive power. This adjustment brings the power factor closer to unity and ensures the electricity consumed is used in the most effective way possible.

Ooffsetting inductive loads such as motors, lifts and HVAC systems, power factor correction reduces current draw, stabilises voltage and ensures electrical infrastructure operates within optimal limits. When combined with modern monitoring platforms and energy management software for efficiency, power factor correction becomes part of a wider strategy to optimise energy performance across entire portfolios.

Power factor correction units

A power factor correction unit is the equipment installed to deliver reactive power compensation. These units are usually installed at the main distribution board or close to high-load equipment, depending on the size and complexity of the facility.

Fixed capacitor banks are used in environments with stable electrical loads, while automatic power factor correction units adjust in real time as demand changes throughout the day. Automated systems are particularly valuable in commercial buildings where load profiles fluctuate, ensuring correction remains accurate without overcompensation.

In larger estates, power factor correction units are often integrated into integrated workplace energy systems, allowing facilities teams to align electrical efficiency with broader operational and sustainability objectives.

How power factor correction works

Power factor correction works by counteracting the reactive power drawn by inductive equipment. When motors or transformers operate, they create magnetic fields that cause current to lag behind voltage, increasing the apparent power required from the supply. Capacitors installed within power factor correction units generate reactive power that offsets this lag, effectively realigning current and voltage so that a greater proportion of supplied electricity is converted into useful work.

As loads switch on and off throughout the day, automatic systems measure power factor continuously and activate or deactivate capacitor stages as required. This real time balancing reduces current flow across the electrical network, stabilises voltage and improves overall electrical efficiency without disrupting building operations.

When supported by intelligent monitoring tools and a robust guide to energy management systems, facilities managers gain visibility into performance trends, enabling proactive optimisation and ensuring power factor correction remains effective as building usage, occupancy patterns and equipment demands evolve over time.

Power factor correction calculation

A power factor correction calculation determines the size and capacity of equipment required to achieve a target power factor. The process typically involves measuring the current power factor, reviewing real power consumption and calculating the level of reactive power that must be offset.

Most UK organisations aim for a power factor of 0.95 or higher to avoid utility penalties and improve system efficiency. While the calculations themselves follow established electrical formulas, they are usually carried out by qualified engineers using data from energy meters or building management systems to ensure accuracy.

Benefits of power factor correction

Power factor correction delivers a wide range of operational and financial benefits for commercial and industrial buildings. Electricity bills are reduced by eliminating excess reactive charges and improving overall efficiency, particularly for organisations subject to capacity based or kVA related tariffs. By lowering the current drawn from the supply, power factor correction also helps businesses avoid unnecessary utility penalties and improve the cost predictability of their energy spend.

Electrical infrastructure operates under significantly lower stress once power factor is improved. Reduced current flow minimises heat build up in cables, switchgear and transformers, which in turn lowers the risk of insulation failure and electrical faults. Over time, this contributes to fewer breakdowns, reduced maintenance interventions and a measurable extension of asset lifespan across critical equipment such as motors, drives and distribution boards.

Improved power quality also plays an important role in supporting business continuity. By stabilising voltage levels and reducing losses across the electrical network, power factor correction helps prevent nuisance tripping, voltage dips and unplanned downtime that can disrupt operations. This is particularly valuable in environments where sensitive equipment, automation systems or data infrastructure are in use.

From a strategic perspective, power factor correction improves overall system capacity without the need for costly infrastructure upgrades. Freed up capacity can be used to support business growth, additional equipment or electrification initiatives such as electric vehicle charging.

When combined with modern monitoring tools and a structured guide to energy management systems, power factor correction becomes a foundational component of long-term energy optimisation. It supports more accurate energy reporting, enables continuous performance improvement and aligns closely with sustainability and carbon reduction objectives across UK property portfolios.

Power factor correction in the UK

Power factor correction UK considerations are shaped by utility billing practices and sustainability expectations. Many UK electricity suppliers apply penalties when power factor falls below agreed thresholds, particularly for larger commercial and industrial customers. These charges are designed to discourage inefficient use of the national grid and shift responsibility back to the building operator.

Improving power factor aligns closely with sustainable energy management practices, helping organisations reduce wasted capacity, lower carbon emissions and support compliance with environmental reporting frameworks increasingly expected by investors, regulators and occupiers.

When power factor correction is needed

Signs that power factor correction may be required include consistently high reactive energy charges, overheating electrical equipment, frequent transformer overloads or poor results during energy audits. Facilities with a high concentration of motors, lifts or older mechanical systems are particularly vulnerable to low power factor.

Regular monitoring and analysis allow these issues to be identified early, preventing inefficiency from becoming a persistent cost.

Ready to improve your energy performance

Power factor correction may not be visible on the surface, but its impact on efficiency, reliability and sustainability is substantial. By combining corrective hardware with intelligent energy management software for efficiency and scalable integrated workplace energy systems, organisations can gain real time insight, optimise electrical performance and unlock long term value across their portfolios.

With the right tools and data in place, power factor correction becomes one of the most practical and cost-effective steps UK businesses can take to strengthen energy performance today and into the future.

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