Power factor

Power factor measures how much of the electricity sloshing through a wire actually does useful work versus how much merely shuttles back and forth uselessly. The classic analogy is a glass of beer: the liquid you can drink is the real power (kW) that turns motors and heats homes, while the foam on top is reactive power (kVAR) that takes up space in the glass but quenches no thirst. Power factor is the ratio of beer to the total of beer plus foam — a number from 0 to 1, and the closer to 1, the less wasteful froth.

Reactive power arises because motors and transformers store energy in magnetic fields, pulling current that lags the voltage and never gets consumed — yet the utility's wires and transformers must still be sized to carry it. A factory running at a power factor of 0.7 forces the grid to push 43% more current than a factory at 1.0 doing identical work, which is why utilities surcharge poor power factor and why engineers bolt capacitor banks across heavy inductive loads to 'cancel' the foam and pull the factor back toward unity.