Course Correction: Residential Power Factor

Annual Report
To maximize the impact of efficient technologies, the industry needs to correct residential power factor
FY 2017-2018
August 2021

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The Unsung Hero of
Distribution Capacity
Over the past several decades, utilities, building energy
managers, and homeowners have been increasingly in-
vesting in energy efficiency measures, efficient appliances
and rooftop solar. These efforts have saved countless
megawatt-hours of energy and millions of tons of green-
house gas emissions, and the need for these measures
are only increasing as we continue to decarbonize the
power sector. However, despite this progress, there is an
often overlooked but increasingly concerning metric that is
preventing the industry from maximizing residential sector
energy efficiency investments - total power factor. Or
power factor for short, is a measurement for how difficult
it is to get power to a building. Power factor is measured
in fractions on a scale of 1.0, and a low power factor
means that a utility has to supply more current to a home
to get the same amount of work (heat, light, motion, etc.)
as a home with higher power factor.
To demonstrate the challenges and opportunities associat-
ed with total power factor, we used Pecan Street’s home
energy use and PV data to explore the grid impacts of
poor residential power factor and the system benefits of
power factor correction. The analysis showed that by im-
proving power factor of the homes in our sample, an ad-
ditional current capacity of 12-16% to the distribution sys-
tem can be achieved. This savings represents a significant
increase in transmission and distribution capacity that
would lower energy sector emissions and free up capaci-
ty for serving additional customers with existing genera-
tion assets - all without upgrading any utility infrastructure.
in their service territory, number of outages, total hours of
outages, energy demand, and increasingly, the amount of
energy generated from rooftop solar. Utilities are also
looking at the adequacy of wires and other transmission
infrastructure required to get power from substations to
homes and businesses, which is where total power factor
is used to measure how much of the electricity supplied to
a facility is used to do work. Utilities monitor these indica-
tors to ensure the grid can reliably operate and serve cus-
tomer loads without interruption.
Pecan Street’s research also looks at these indicators, in-
cluding power factor, since we started collecting data
more than ten years ago. Over the course of the past
decade, we saw shifts in power factor as new efficiency
measures and rooftop solar were more widely adopted.
Unfortunately, some shifts have not been for the better.
This analysis explores the changes we’ve seen in residen-
tial power factor, why these changes are happening, the
problems it poses, and what can be done to improve
residential power factor. We also outline strategies for
implementing broad scale residential power factor correc-
tion technologies, including a preferred solution for whole-
home power factor correction in conjunction with device-
level power factor correction for new appliances. The
analysis provides a roadmap for utilities, regulators, and
appliance manufacturers for how they can set policy and
prioritize new technology adoption that will free up distri-
bution capacity and reduce greenhouse gas emissions.

Most homeowners don’t think much about utility in-

frastructure or the connection between their homes and
the grid. Utility companies on the other hand, think about
it all the time. Utilities are looking at total usage of homes

PECANSTREET.ORG 1

Power Factor 101

Power factor is one way distribution engineers describe how much capacity of the wires, transform-
ers and other grid equipment is being used to get electrical power into homes and businesses. A
power factor measure of 1.0 is perfect and means that every bit of current that is delivered by the
utility is performing work in that building. As power factor declines, more of the utility’s distribution
capacity will be used, but it is not being turned into light, heat, or motion in the building. That capaci-
ty is essentially wasted, resulting in excess losses and reduced capacity that are costly for utilities and
responsible for additional greenhouse gas emissions.

The main contributors to poor power factor in a home are systems that rely on switch mode power supplies such as vari-
able speed HVAC systems, LED lighting, and other electronics. The circuitry and electrical design of these items have
evolved over recent decades, increasing efficiency (which is a good thing) but decreasing residential power factor. This
trade-off is not a zero-sum game. These efficiency gains can be achieved while also correcting for poor power factor.

The commercial and industrial sector already have economic and technological solutions that addresses power factor.
When an industrial or commercial facilities’ power factor drops between 0.8 and 0.9, they are often penalized and
charged additional fees by the utility because they are using up distribution resources that they do not need. These penal-
ties cover the cost of the excess capacity being used up by the facility’s poor power factor and incentivizes these cus-
tomers to take steps to improve their power factor. The penalties are typically high enough that the corrective equipment
pays for itself in a few years (sometimes months) and may have a lifetime of 7-30 years.

Residential customers are a different story…

Residential Power Factor

Residential power factor is different in that most homeowners cannot afford to hire a professional engineering team to
analyze and install power factor correction systems in their homes, and until recently, they have not needed to. Histori-
cally, residential customers have been considered a high-quality load with a power factor near 0.95. This was be-
cause most of the load in residential structures was coming from HVAC, large appliances, and incandescent lighting –
which all have a near perfect power factor. The HVAC systems were typically induction motors with power factor cor-
rection included, and the same goes for large appliances manufactured until the 1990’s.

Today’s appliances and homes produce a lower power factor. Electronic

ballasts for lighting (LED or CFL), energy efficient electronic variable speed
drives for motors, and direct drive variable speeds for smaller appliances
mean significant increases in the number of switch mode power supplies.
These types of devices all often have both displacement and distortion in
their current waveforms, dropping power factor in the home.

A common analogy for understanding the relationship between the elements

that make up power factor (apparent power, active power, and reactive
power) is that of the beer glass. Active power is measured in watts (W) and
is the circuit’s capacity to perform work at a given time. Reactive power is
measured in Volt-Amperes reactive (VAR) and supports the voltage necessary
Figure 1: Power factor as a beer glass analogy
to turn on an alternating current (AC) load.

PECANSTREET.ORG 2

Apparent power is measured in Volt-Amperes (VA) and is the product of the current and voltage of the circuit, or stated
more simply, the combination of the active and reactive power. The beer glass analogy shows the apparent power is
the beer glass itself (the wires, transformers and protective equipment at the distribution level) and contains the sum of
the active and reactive power. The active power is the beer in the glass (the circuit's capacity to do work, a.k.a. the
good stuff). The reactive power is the beer foam (provides voltage support but lowers power factor... necessary but
should be minimized).

Reactive Power is required when current is displaced and/or distorted from voltage in a circuit. Current displacement
occurs when the current and voltage waveforms become out of phase with each other. Inductive loads like motors
cause the current to lag the voltage while capacitive loads like generators cause the current to lead the voltage. Cur-
rent distortion occurs when multiple current waveforms of varying frequency are combined. Current distortion is most
commonly caused by devices with non-linear loads like switch mode power supplies that turn on and off quickly. The
distorted current wave in Figure XX below is from a 13W LED that was measured in the Pecan Street lab.

Figure XX shows two examples of Power Factor and the corresponding waveforms of voltage and current. The figure
on the left has a power factor of 1 since the voltage and current are in phase with no harmonic distortion. When this
occurs no reactive power is required from the grid. The figure on the right has a power factor of 0.8 which is caused
by current displacement and/or distortion in the home’s circuits. In this case the grid must supply reactive power to
provide voltage support.

Figure 2: Power factor and corresponding waveforms of voltage and current

PECANSTREET.ORG 3

A Setback for Residential Power Factor Correction

Unfortunately, in the 1980’s and early 1990’s residential power factor experienced a setback in public perception.
Several unscrupulous companies sold power factor correction devices for pool pumps, HVAC systems, and refrigera-
tion. Deceptive product displays in home improvement stores claimed to show that the devices reduced power by a
certain percentage - but they often did not live up to the hype. Not only were these false claims, residential customers
were not penalized monetarily for a poor power factor or rewarded for good power factor, so there was no mecha-
nism for consumers to recoup the investment. In 1984 the Federal Trade Commission (FTC) stepped in to prevent these
companies from making claims that their devices could save homeowners money. Unfortunately, this history means res-
idential power factor correction has some bias to overcome in the marketplace and with investors.

The Issue Today

The issue today is an increase in the current distortion and displacement that lowers power factor. This issue is exacer-
bated in homes with solar PV systems. Rooftop solar and batteries typically only provide the direct power – what engi-
neers call the ‘real power’ – needed for a device to operate. The grid has to supply power for the distortion and dis-
placement current components – i.e., the leading and lagging power. This creates a load on the distribution system
that is quite different from historical norms, which should not exist and can also create voltage instability. For example,
a home with a power factor of .8 that is being powered by rooftop solar will still need to draw the 20% of its total
power that is caused by distortion and displacement from the grid. In areas with higher solar density, poor power fac-
tor becomes more apparent to utilities and grid operators, who then often erroneously blame solar for the excess grid
demand rather than the poor power factor.

How do we know solar isn’t to blame?

To conduct a real world analysis of residential power factor, we selected a sample of 146 homes from Pecan Street’s res-
idential research network and testbed. Our one-of-a-kind research network includes more than 1,000 volunteer partici-
pants whose home energy use (and solar generation) is measured and analyzed in real-time. The sample for this analysis
included 114 homes in Texas and 32 homes in New York, with all of the homes having rooftop solar systems. We chose
homes with solar to demonstrate the benefits of power factor correction in an ideal residential energy system. Potential
solutions discussed later in the paper explore the benefits of integrating solar systems, battery storage and grid services
that typify the ideal smart home of the future. Almost all of the homes in Texas are in Austin at the Mueller development
and were built after 2000. Most homes in New York are in Ithaca and have more evenly distributed ages. The majority
of homes in the sample are between 1,000 - 3,000
square feet, with Texas homes being slightly larger on
average and with more outliers above 4,000 square
feet. We assume a similar distribution of appliances in
our New York and Texas homes since these items gen-
erally have a 10-20 year lifetime and are replaced
periodically. Newer homes are more likely to have ap-
pliances and HVAC systems with variable speed drives,
significant LED/CFL lighting as ceiling “can” lights, etc.
Despite this, we found no significant relationship be-
tween the age or size of the homes in our sample and
power factor. Figure 3: Average current saved per home in New York
and Texas if Power Factor was corrected to 0.95

PECANSTREET.ORG 4

 For this analysis, we measured current at the main panel to calcu-

late power factor since the capacity of distribution equipment is
limited by their current ratings. Losses in the distribution system are
dominated by resistive losses which are equivalent to I2 x R. For
example, this means a 5% savings in current saves approximately
10% of the I2 x R losses, and a 10% savings in current is just under
20% savings in I2 x R losses. To calculate Power Factor using Real
Current and Apparent Current we used the following formulas:

Re a lC u r r e n t = ( | Re a lG r i d Po w e r | )/(To t a l Vol t a ge)

A p p a r e n t C u r r e n t = (A p p a r e n t G r i d Po w e r)/(To t a l Vol t a ge)

Figure X below shows the current transformer (CT) wiring for our
eGauges to measure current, voltage, harmonic distortion and
phase angle at our sample homes. All of the measurements are tak-
en from CT1 and CT2 at the main breaker. Our calculations use
voltage measurements from both legs of the electrical panel to
avoid any errors from approximating each leg at 120V.

To quantify the potential saved current due to power factor correc-

tion we increased the real current in our sample during every hour
of the year until it reached a power factor of 0.95. If the power
factor was already 0.95 for a given hour it was not changed. Thus, Figure 4: Current transformer (CT) wiring for eGauges to
measure current, voltage, harmonic distortion and phase
our calculation for saved current is: angle at sample homes

Sa v e dC u r r e n t = A p p a r e n t C u r r e n t − (Re a lC u r r e n t )/(0.95)

PECANSTREET.ORG 5

Research Results
The average power factor of each home in the sample by state can be seen in Figure X be-
low. The chart is segmented by the hour of the day and quarter of the year to show how
changing loads throughout the day and year affect power factor. We expect to see differ-
ences in the power factor curve between Texas and New York because solar production
peaks at different times of the day (due to different latitudes) and the HVAC load profile in
the two regions is different. This results in seasonal differences between the two locations.

2020 Average Power Factor by Hour of Day

Figure 5: Average power factor by hour of day in New York and Texas Samples

Power factor is generally lowest during daylight hours in both Texas and New York. This is partly an effect of residen-
tial solar systems producing active power, but not reactive power. When residential solar systems displace some or all
of the grid’s active power with their own generation, the grid still must support the same amount of reactive power as it
would if there was no solar production. As the amount of active power supplied by solar systems increases, the amount
supplied by the grid decreases and the reactive power supported by the grid remains constant. This causes the power
factor in our measurement to decrease. However, it is important to note that the solar systems themselves do not cause
the reactive power to increase. The same amount of reactive power is supplied by the utility whether the solar system is
producing power or not. However, the ratio of the active power to reactive power at the grid interconnect does
change when a solar system is connected to a home.

PECANSTREET.ORG 6
 Figure 6: Active and reactive power in solar vs. non-solar homes

Real current and apparent current averaged by hour of the day for each quarter of the year can be seen in Figure X.
The points on the chart where the difference between the apparent current and the actual current are the largest is
where the most reactive power (power that does not do work) is highest. In an ideal scenario, real current would
match apparent current and the space between the light and dark orange area of the graph would be minimized.

2020 Average Apparent Current vs. Real Current by Hour of Day

Figure 7: Average apparent current vs real current by hour of day in New York and Texas samples

PECANSTREET.ORG 7
The majority of the homes in our sample produce more solar power than they use in the middle of the day during sum-
mer months. Since real current is calculated with the absolute value of the grid power, the solar power sent to the grid
produces the midday ‘hump’ signature in both states. In Texas, the second hump in Q2 and Q3 is caused by the high
HVAC load during summer months. Notably, in Texas this hump occurs during the summer peak load hours of 2-6PM
on hot summer days. Correcting power factor would result in more usable distribution capacity at the time of day and
year when grid demand is highest and solar generation is high.

Similarly, power factor is also low on winter mornings in Q3 and Q4. As homes in Texas continue to electrify, particu-
larly with electric heat pumps for space and water heating, this will also coincide with the maximum current saved from
power factor correction. The New York Independent System Operator (NYISO) also experiences a late afternoon
summer peak for the grid serving homes in our New York sample. The summer peak is milder than in Texas, but the
winter peak is more drastic. This winter peak load will also increase as more homes electrify their space and water
heating, making electric distribution capacity increases from reduced power factor more economical.

Figure X shows the current that would be saved in our sample if the power factor for every hour below 0.95 was in-
creased to 0.95. In this scenario, the early hours of the summer peak demand hours in the ERCOT grid would see a
30% increase in saved current on homes with solar. ERCOT’s winter peak hours would see a 20% increase in current
capacity. Homes in New York follow a similar pattern for summer and winter grid peak, although the potential winter
savings aren’t as dramatic as in Texas.

2020 Average Percentage of Current Saved Per Home When

Correcting Power Factor to 0.95 for Each Hour of the Day

Figure 8: Average percentage of current saved per home when power factor is corrected to
0.95 for each hour of the day in New York and Texas samples

PECANSTREET.ORG 8

Correcting power factor to 0.95 or better for every hour of the 2020 Average Apparent, Real & Saved
day would have provided an additional current capacity of Current Per Home at 0.95 Power Factor
12-16% to the distribution system in the homes in our sample.
The current savings seen in Figure X represent a significant
increase in transmission and distribution capacity that would
lower energy sector emissions and free up capacity for serving
additional customers with existing generation assets - all with-
out upgrading any infrastructure. The general trend of low
power factor during both summer and winter peak demand
hours seen in our sample likely exists in all regions of the coun-
try. Regional variation will occur between other regions as it
does between Texas and New York, but homes with solar Figure 9: Average apparent, real and saved current per home
when power factor is 0.95 in New York and Texas samples
systems throughout the country are expected to experience simi-
lar benefits to the homes in our sample from power factor correction.

Recommendations for Residential Power Factor Correction

Residential power factor becomes increasingly important to solve for overall grid reliability
and power affordability as residential electrical interconnection transitions from a one-way
system with the utility supplying all power and homes serving simply as consumers to a pro-
sumer-based system in which buildings with solar and the utility have a two-way power ex-
change relationship. The improvements in distribution current savings discussed here are one
part of the equation. Further consideration should be given to the resulting improvements of
voltage control and stability as well as ease of black start operations when power factor is
high and the chances of system resonances and instability are reduced. If modern high-effi-
ciency appliances and electronics operate in harmony with localized, distributed generation,
overall system efficiencies improve and we will maximize the benefits of low-cost distributed
renewable generation.

There are three primary methods to resolve low power factor in homes:

• A whole-home approach: installing power factor correction solutions that have been effective in the commercial
and industrial sector at the electric meter interconnection with the home.

• For solar systems only: require that solar or battery storage inverters produce reactive power to meet the home’s
total power needs rather than only real power.

• At the device/appliance level: Mandate that devices and appliances meet a minimum power factor of 0.95.

PECANSTREET.ORG 9

 Figure 10: Residential power factor correction solutions

Whole-home Power Factor Correction

A whole-home approach to residential power factor correction will yield the greatest improvements in power factor and
maximize grid capacity and emissions reduction benefits. This approach would require new technology that is not yet
in use or under development. However, there are technologies from the commercial and industrial sector that could be
adapted for residential use. A whole-home approach is best for several reasons described below, but chief among
them is the fact that the devices and appliances causing power factor degradation are already in use in homes across
the country and it is unrealistic and counterproductive to expect homes to replace their appliance based on power
factor alone.

An ideal whole-home solution would be a high efficiency, full time, cycle-by-cycle power factor correction based on
high speed, low loss Silicon-Carbide or Gallium Nitride semiconductors. The distortion and displacement components
of the line current for a residential structure are dynamic, changing as quickly as one 60Hz cycle to the next. Tradi-
tional approaches used for feeders or large commercial structures like fixed capacitor banks will not work because
home loads may change from inductive to capacitive hundreds of times per day. The distortion profile is even more
dynamic, changing every few seconds as electronics within the home change load current rapidly while in use. Given
the growing complexity of in-home devices, home load dynamics, and the effect these have on power factor, a whole-
home solution in combination with device level requirements for new appliances would lead to the greatest improve-
ments in performance and yield the greatest grid system benefits.

Industrial Solutions Applied to the Residential Sector: Power factor correction equipment used in the commercial
and industrial sectors could be adapted for residential applications that would require relatively simple electronics in-
stalled at a home’s electrical panel. Generally, this is a group of capacitors and inductors that are connected to the
main panel, which measures current displacement and uses capacitors (for leading current) or inductors (for lagging
current) to bring current and voltage closer to unity.

PECANSTREET.ORG 10

Current Distortion Solved at the Panel-Inductive Filtering: Current distortion can be remedied with harmonic miti-
gating transformers or line reactors. Harmonic mitigating transformers are generally used where there are large concen-
trations of computers or communication equipment, such as offices, schools or medical facilities. The issue with trans-
formers and line reactors is that they can introduce other system issues, such as higher voltage distortion, and are un-
able to dynamically adapt to changing load conditions. These solutions are best used with loads that are relatively
static, which preclude their use given the variety of home electrical loads. Additionally, as semiconductor technology
continues to improve the cost of active correction will quickly make it less expensive than technologies reliant on large
amounts of comparatively iron and copper, which are comparatively expensive.

Current Displacement Solved at the Solar Inverter: Another standalone solution for power factor correction is to
produce reactive power from a solar inverter. Producing reactive power onsite along with active power is preferable
because long range high voltage transmission of reactive power has high transmission losses. The main downside to
this solution is that solar inverters currently only provide reactive power in the form of displacement correction. Another
issue is that producing reactive power can sometimes lower the active power output which would potentially negate
some distribution capacity gains from increasing power factor. Since reactive power can be caused by current dis-
placement or distortion, this solution will only increase power factor if the majority of reactive power is caused by dis-
placement. Through our research we know that residential homes can have significant amounts of distortion depending
on the lighting, appliances and other miscellaneous loads. Therefore, while reactive power production from a solar
inverter could be effective at improving residential power factor, it is not a definitive solution to the problem unless the
inverters are designed to provide both harmonic cancellation and displacement correction, full time, without decreas-
ing the real-power production capabilities of the inverter.

Current Distortion Solved at the Device/Appliance Level by Manufacturers: Another way to increase residential
power factor is at the manufacturer level. The International Electrotechnical Commission maintains an international
regulation, IEC 61000-3-2, which aims to curb main voltage distortion by setting upper limits for harmonic currents in
equipment with a rated current of up to 16A. California’s Title 20 also has power factor requirements on over 50 ap-
pliances, many of which can be found in a residential setting. Table X shows some common residential loads and their
corresponding Title 20 power factor limit. Limits for computers, LED’s and large battery charging systems went into
effect in 2019 so their full impact won’t be realized until a full product refresh cycle takes place. Ideally, Title 20 will
improve residential power factor internationally as manufacturers raise all their products to California’s standards.
However, compliance in California is estimated to be 80-90% (source) and it is yet to be seen how the more stringent
regulations will affect that rate.

Several voluntary power factor correction programs have Table 1: California Title 20 Power Factor Requirements
been created to provide certification for devices that meet
California Title 20 Power Factor Requirements
minimum power factor standards. The 80 Plus certifica-
tion and the DOE’s EnergyStar guidelines both advocate
for devices to have a power factor of at least 0.9 (source).
The certifications theoretically help manufacturers market
their products to make them more appealing, but they
have not yet reached widespread adoption levels. Addi-
tionally, the EnergyStar requirements for residential light-
ing aren't particularly strict so it’s questionable whether
these types of programs can deliver significant results.

PECANSTREET.ORG 11

 A Solvable Problem With Win-Win Solutions

Residential power factor may be a growing problem but one that is solvable and has signifi-
cant benefits for grid operations, utility bottom lines, and emissions reductions. Of all the solu-
tions discussed here, the greatest benefits could be realized by pursuing a whole-home ap-
proach to residential power factor correction. However, if any of the solutions discussed
above were deployed at scale, the improvements in residential power factor would make it
easier to integrate more distributed generation, reduce greenhouse gas emissions, and free up
distribution capacity to serve more customers with existing infrastructure. These benefits make
it clear that utilities, grid operators, regulators, and appliance manufacturers should explore
these relatively low-cost, high-yield solutions to create a modern and more efficient grid.

To achieve a return on investment commensurate with the overall system benefits that the technological solutions dis-
cussed above would provide to the grid, policies will need to be implemented that require utilities to analyze and ap-
propriately compensate customers for power factor correction.

Some policy recommendations grounded in precedent from the transition to energy efficient appliances include:

1. Making it law: Introducing it as a portion of a bill and making it part of the Code of Federal Regulations. In this
case, the likely enforcement authority would be the FTC, and therefore, compliance would likely be high. Unfortunately,
a likely pathway for this may take the form of updating EnergyStar standards, which are not mandatory – you can still
buy a non-energy-star version of an appliance.

2. Harmonizing product safety and operations standards with existing IEC standards: This would require stan-
dards process through ANSI/UL and would take 2-5 years for standards writing and then the enforcement would hap-
pen through local code inspectors. Compliance would be relatively high in areas with strong inspection requirements
and low in unincorporated areas of the country without inspections.

3. Requirements set in the National Electric Code: Compliance would be relatively high in areas with strong
inspection requirements and low in unincorporated areas of the country without inspections.

Furthermore, devices can be designed to achieve high energy efficiency and high power factor. In South Korea, elec-
trical code dictates that all appliances and power-consuming devices achieve a power factor of 0.95 or better. With-
out any such requirements or incentives in the United States, companies are not investing in certifying, selling and mar-
keting these options in the US. Establishing a power factor standard commensurate with Energy Star and working with
building code authorities to include requirements for appliances that meet this standard will help to correct poor power
factor upstream at the point of device manufacturing.

PECANSTREET.ORG 12







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