A capacitor bank corrects the timing of the current, but on a modern panel its shape is the larger problem. We correct timing and shape at the panel, with no capacitor step to wait for.
Power factor is the share of the power a site is supplied with that turns into work. The lower it is, the more current the supply carries for the same work. For a century the fix was a capacitor bank.
What power factor is
The controller at the panel corrects timing and shape together. Power factor has two parts. Timing is how well the current wave lines up with the voltage wave. Shape is how far the current departs from a smooth sine. The meter multiplies them. A bank corrects the timing and leaves the shape as it was 3.
- Transformer capacity. Motor plants at low power factor. A motor plant at 0.75 power factor draws 133 kVA to run 100 kW, so the transformer is sized for 33 kVA more than the work 1.
- Drives and supplies. Panels of rectifier loads. A drive whose current arrives exactly in step, carrying 31% distortion, still runs at 0.95 power factor 4.
- Capacitor banks. Sites that already corrected. In a 2024 test on motors and fluorescent lamps a bank took the timing to 1.00, and the true power factor worked out from the readings was 0.85 and 0.82 5.
- At the panel. Correction beside the loads. The controller supplies the reactive and harmonic current from its own terminals, so timing and shape both move toward 1.0 1.
Active power is the power that does work. Apparent power is the voltage times the current, the whole demand the supply has to carry. Reactive power is not unused: without it a motor has no magnetic field and makes no torque 16. The cost is in what carries it. Power factor, also called true power factor, is active power divided by apparent power 2. Under a distorted current it has two parts.
Displacement power factor (DPF) is the timing part: it falls as the angle between the voltage wave and the current wave grows. A capacitor bank corrects this part. The distortion factor is the shape: 1 / sqrt(1 + THDi²), where THDi is the total harmonic distortion in the current. A bank does not change this part. When the voltage is close to a sine wave, the two multiply 3:
PF = DPF × 1 / sqrt(1 + THDi²)
At 60% distortion, a site can have exact timing and a true power factor of 0.86.
What it costs
Reactive current is paid for three times. The utility bills it as a power factor penalty or as kVA demand. Each charge has its own window, often 15 minutes for demand and a month for kVARh. The transformer pays for it as heat and lost capacity: a 500 kVA transformer at 0.75 power factor is a 375 kW transformer. The feeders pay for it as I²R loss on current that does no work.
To price the timing problem, take the utility’s rate per kVA of demand and multiply it by the difference between the kVA billed and the kW the site used. Then add the cost of the shape problem, which lands in the transformer and the feeders rather than on the bill.
A 2024 test ran an automatic capacitor controller on motors and fluorescent lamps. It reached a displacement power factor of 1.00 while the current distortion read 63% and 70%. Worked out from the measured distortion, the true power factor was 0.85 and 0.82 5. No published national total says what power factor penalties cost U.S. facilities.
How the industry has dealt with it
The industry’s answer is the capacitor bank, fixed or switched. A contactor-switched bank is the slower of the two. It waits a default 10 seconds between steps and blocks a discharged step for 50 seconds 7. A thyristor-switched bank is faster and closes within three cycles 8.
Neither bank changes the shape. Both add capacitance, and capacitance and the supply’s own reactance together favour one harmonic, which they can amplify instead of absorb. That resonance falls at the order sqrt(S_sc / Q), where S_sc is the short-circuit power and Q the bank rating. So a bank installed for the timing problem can make the shape problem worse.
In one leading maker’s worked example, a 350 kvar bank on a 630 kVA transformer resonates at the 5.5th harmonic, next to the 5th a drive produces 9. The Army’s facilities manual lists the results: blown fuses, failed capacitors and tripped relays 10.
The bank was designed for induction motors. Much of today’s load is rectifiers: drives, LED drivers, chargers and servers, whose timing is often close to exact while their shape is not 4,11. Active harmonic filters and static VAR generators supply both from power electronics, one maker’s within two cycles for harmonics and a quarter cycle for power factor 12.
How Software-Defined Electricity handles it
The controller connects to the panel bus through its own breaker, beside the loads and never in the power path, so their supply current does not pass through it 1. It supplies the reactive and harmonic current the loads draw, through the 23rd order and within its rating, from its own terminals, so the source sees the loads’ active current and little else 1.
It responds in under 5 microseconds, correcting the current waveform digitally and continuously, with no step to wait for 1. It adds no capacitor bank, so the bank resonance above does not arise from it. It corrects any timing error from a full quarter cycle of lag or lead down to none, which is a displacement power factor from 0 to 1.0, capacitive or inductive. The rating is 60 A per phase for the VectorQ5 and 50 A for the VectorQ2 1.
Four measured tests show the result. An independent third party facilitated a test at a 208 V panel, measured on a power quality analyzer. A lightly loaded 1.5 hp motor read 0.15 displacement power factor with correction off and 0.99 with one unit on. Reactive power fell from 0.9 kVAR to 0. The motor circuit’s current fell from 2.2, 2.5 and 2.5 A to 0.5, 0.4 and 0.5 A 13.
An independent audit measured a 120/208 V panel on a power quality analyzer. It logged a power factor of 0.85 with the unit off and 0.955 with it on 14.
On two server racks, a field assessment recorded power factor rising from 0.931 to 0.999 and from 0.831 to 0.995. Reactive current at the fundamental fell from 7.27 A to 0.18 A 15. The container test, row 4d, recorded apparent power falling from 8,339 VA to 7,229 VA 6.
Where it matters
The penalty lands on motor-heavy sites. An industrial plant runs drives and presses. A water plant runs pumps at part load. A ship pays for reactive current in generator fuel and capacity.
Two of the three directions this site calls Opportunity Pillars meet at the meter. At Consumption, drives and supplies make the reactive and distorted current. At Delivery, the utility bills it.
What to measure
Read true power factor at the service entrance, not displacement power factor, with a Class A meter that reports both. If the two differ, the problem is the shape. A bank will not fix it. Read kVA demand in the same window the utility bills. Read the feeder current before and after.
The change is upstream of the panel, at the transformer and the meter. The branch circuits carry the same reactive, distorted current as before. A stepped bank misses loads whose reactive swings finish inside ten seconds: welders, presses and crane hoists 7.
Start by reading true and displacement power factor at one panel.
Frequently asked questions
How is power factor corrected without capacitor banks?
The 3DFS controller corrects power factor at the panel with power electronics 1. It connects to the panel bus through its own breaker, never in the power path, and supplies the reactive and harmonic current itself 1. It responds in under 5 microseconds, with no capacitor step to wait for 1, and adds no capacitor bank, so no bank resonance arises. In one test a lightly loaded motor read 0.15 displacement power factor off and 0.99 on, as the analyzer reported 13.
What is the difference between true power factor and displacement power factor?
Displacement power factor is the timing part, the angle between voltage and current, and a capacitor bank corrects it. When the voltage is close to a sine wave, true power factor multiplies that by the distortion factor, 1 / sqrt(1 + THDi²), the shape of the current 3. A bank cannot correct the shape and can worsen it 9. In a 2024 test a bank reached displacement 1.00 while true power factor, from the distortion, was 0.85 and 0.82 5.
Can a capacitor bank make harmonics worse?
Yes, through resonance. A bank adds capacitance, and capacitance and the supply’s own reactance together favour one harmonic, which they can amplify instead of absorb 9. That resonance falls at the order sqrt(S_sc / Q), where S_sc is the short-circuit power and Q the bank rating 9. In one leading maker’s worked example, a 350 kvar bank on a 630 kVA transformer resonates at the 5.5th harmonic, next to the 5th a drive produces 9.
What does low power factor cost a site?
Reactive current is paid for three times. The utility bills it as a penalty or as kVA demand. The transformer pays for it as heat and lost capacity: a 500 kVA transformer at 0.75 power factor is a 375 kW transformer, and a motor plant at 0.75 draws 133 kVA to run 100 kW 1. The feeders pay for it as I²R loss on current that does no work. No published national total says what the penalties cost U.S. facilities.
Sources
- 3DFS, VectorQ Technical Overview (current revision), Technical Specifications table, pp. 9, 12 and 14. First-party.
- MIT OCW 6.622, Lecture 4 (Perreault), pp. 2-4. https://ocw.mit.edu/courses/6-622-power-electronics-spring-2023/mit6_622_s23_lec04.pdf
- A leading maker’s Electrical Installation Guide, Harmonic distortion indicators, Power factor. https://www.electrical-installation.org/enwiki/Harmonic_distortion_indicators_-_Power_factor
- Heydt, Electric Power Quality, Tables 10.4 and 10.8.
- Diniș and Popa, Energies 2024, 17(7), 1647, Table 25, true PF computed from the table. https://doi.org/10.3390/en17071647
- 3DFS, refrigerated container bench test, rows 4d and 3b. First-party.
- A leading maker’s capacitor bank controller user guide, parameters 305 and 401, pp. 20 and 23.
- A leading maker’s thyristor-switched capacitor bank product page.
- A leading maker’s Electrical Installation Guide, Risk of resonance due to power-system harmonics. https://www.electrical-installation.org/enwiki/Risk_of_resonance_due_to_power-system_harmonics
- U.S. Army, TM 5-689 (2006), paragraphs 5-4 a(2) and 5-4 b.
- Michalec et al., Energies 2021, 14(12), 3665, Table 3. https://doi.org/10.3390/en14123665
- Two leading makers’ active filter catalogs, p. 4-45 and p. 10 (2020-12-18).
- Independent third-party verification report, SDE Technology Verification Testing, p. 14. Facilitated by an independent third party with 3DFS.
- Intelligent Building Solutions, Report for Power Quality Correction by the 3DFS VectorQ2 unit, pp. 12 and 14. Independent audit.
- 3DFS, electrical network analysis of server racks at a data center, overview sheets. First-party.
- Ingarra, N. Understanding the Thermodynamics of Alternating Current. In Compliance Magazine, 2026-10-30. One author’s proposed framework for apparent power, inverter losses and motor efficiency; cited for the statements that reactive power is required for an AC motor to produce torque, that the source feeding an inverter must supply the apparent power, and that inaccurate power calculations can lead to improperly sized components and possible thermal issues. https://incompliancemag.com/understanding-the-thermodynamics-of-alternating-current/
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