Power-Factor Correction Demand-Billing Savings
The dollars a power-factor capacitor returns.
Example
You enter
- Billed real power (kW) 400
- Existing power factor (0-1) 0.78
- Target power factor (0-1) 0.95
- Demand charge ($/kVA-month) 8
- Capacitor-bank cost ($, optional) 5685
You get
- Apparent power before 512.8 kVA
- Apparent power after 421.1 kVA
- kVA reduction (capacity freed) 91.8
- Capacitor size needed 189.4 kVAR
- Annual demand savings $8810/yr
- Simple payback 0.64531
Details, formula, and sources
a 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.
kva_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.
The 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.
The power triangle and the demand-savings arithmetic are public; capacitor-sizing and PF-billing worksheets are widely published.
Estimate. AHJ and licensed professional govern.
Field names used by the API: real_power_kw, pf_existing, pf_target, demand_per_kva_mo, capacitor_cost, kva_existing, kva_target, kva_reduction, kvar_needed, annual_usd, payback_years
- Apparent power kVA = kW / power factor; correcting the power factor cuts the billed kVApower triangle
- Correcting kVAR kVAR = kW x (tan(acos pf_old) - tan(acos pf_new))power triangle
- Demand savings kVA reduction times the effective $/kVA-month over twelve months; diminishing returns above ~0.9utility demand billing