Economics Of Power Factor Improvement

• In economic consideration of power factor improvement our main

aim is to decide a value of Power factor or power factor angle for
which the net saving is maximum.
NET SAVING =
[Saving in annual maximum demand charges] -
[ Expenditure due to power factor correcting equipment]
• The value of power factor for which this NET SAVING is maximum
is known as most economical power factor.
Where,
Saving in annual maximum demand is related to saving due to the
decrease in annual maximum demand. This decrease in annual
maximum demand is due to improved power factor.
Expenditure includes the expense on the interest and depreciation
on the investment over the power factor correcting equipment.