Why is it important to have high Power Factor?

Many medium to large businesses are now being charged a kVA tariff instead of a kilowatt tariff. What this means is that you are being charged for the power you are supplied (kVA) rather than the power that you use (kW). In essence you are paying for the wasted power supplied. Businesses with low power factor (say 0.7 – 0.9) will be paying additional (kVA) charges for this waste. Depending on the tariff you’re on, power factor correction could be a cost effective initiative for your business to reduce electricity costs