Power Factor Correction for a Factory: APFC Sizing, Harmonics and Penalty Recovery

A factory corrects power factor by connecting capacitors, switched in steps by an APFC panel, sized from kW × (tan φ1 − tan φ2). Where your tariff bills in kVAh, a low power factor directly inflates the units you pay for, so correction recovers money every month. Add detuned reactors if drives, UPS or inverters distort the supply, and re-check the size after you add solar.

Why does power factor change your bill?

Power factor is kW divided by kVA. A motor draws real power for work and reactive power to magnetise its core; the reactive part adds current without adding output. Tariffs recover the cost of that current in different ways, so first find how your DISCOM does it.

The UPERC tariff order for NPCL (Noida and Greater Noida) for FY 2024-25 carries the same kVAh conversion text. Other categories and other states can differ, and some tariffs use a separate surcharge and incentive for power factor instead. Read the conditions of tariff for your category and the latest order before you size anything.

What is the saving from correcting?

Under kVAh billing, billed units equal kWh divided by power factor. At 0.85 a plant using 100,000 kWh a month pays for about 117,650 kVAh. At 0.98 it pays for about 102,040. The difference, about 15,600 kVAh, is 13.3% of the energy charge, and it recurs every month. Compare your 12 bills first: divide kWh by kVAh to get your monthly power factor. If it is already 0.97 or above, there is little left to gain, and the money is better spent elsewhere. The lower current also reduces cable and transformer loading, and where fixed charges follow kVA demand, your billing demand may fall too, subject to your contract-demand rules. Our article on power factor penalties in Punjab, Haryana and UP covers the tariff side in more depth.

How do you size an APFC panel?

1. Get the load. Use the kW at the typical working load, not the connected load, from a week of logged data on the main incomer or the 12 bills.
2. Choose a target. Aim for 0.97 to 0.99 lagging at the meter. Do not aim for unity, because a small error then becomes a leading power factor.
3. Calculate kVAr. kVAr = kW × (tan φ1 − tan φ2). For a 400 kW load at 0.85, correcting to 0.98 needs 400 × (0.620 − 0.203) = about 167 kVAr. The apparent demand falls from about 471 kVA to 408 kVA.
4. Split into steps. Build the bank from several steps, for example seven of 25 kVAr, so the smallest step is no larger than the reactive demand at your lightest load. A big single step hunts and overshoots.
5. Set the controller to the target, with a time delay long enough to avoid switching on every load change.

Our power factor correction calculator does this arithmetic from your numbers, and the glossary explains APFC panels.

When do harmonics change the design?

Drives, UPS units, LED drivers and welding sets draw non-sinusoidal current. A capacitor bank on the same bus lowers the system's impedance at harmonic frequencies, and with the transformer's inductance it can resonate. A rough check: the resonant harmonic order is the square root of (short-circuit kVA divided by bank kVAr). A 1,000 kVA transformer with 5% impedance gives roughly 20,000 kVA of fault level at its secondary; with a 175 kVAr bank that is about 10.7, close to the 11th harmonic that six-pulse drives produce. The result can be blown fuses, bulging capacitors, nuisance trips and overheated neutrals.

The usual remedy is a detuned bank: each capacitor step in series with a reactor. A 7% reactor tunes the branch to about 189 Hz on a 50 Hz system, below the 5th harmonic, so the branch looks inductive at 250 Hz and above, and cannot resonate with them. A 5.67% reactor tunes to about 210 Hz. If a power-quality survey shows high current distortion, specify detuned steps and capacitors with a higher voltage rating; very high distortion may need an active filter. Our guide on power quality, harmonics, VFDs and solar inverters explains how the survey is done.

What does solar do to power factor?

Solar inverters usually run near unity power factor, so they reduce the kW you draw from the grid but not the kVAr. Take the 400 kW plant corrected to 0.98: it carries about 81 kVAr. If solar supplies 200 kW at noon, the grid supplies 200 kW and still 81 kVAr, which is a power factor of about 0.93 at the meter. Under a 0.90-based kVAh conversion, that is a worse bill per unit than before. So size the bank for the daytime power factor with solar running, and check with the DISCOM and the inverter supplier whether the inverters may supply reactive power. See the solar calculator and solar EPC for the sizing side.

What goes wrong with APFC panels?

• Over-correction at light load, where the bank stays on and the power factor leads. In the UP schedule above, a lead below 0.95 is billed on the kVAh reading.
• Dead steps. A failed capacitor or contactor silently removes correction, and the first sign is the bill. The UP schedule adds a surcharge where capacitors are found missing or not working. Test capacitance and check contactors every year as part of AMC.
• Heat. Capacitors and reactors run warm and fail early in a poorly ventilated panel.
• DG operation. Do not run the bank on a DG set unless the DG supplier has confirmed it can carry a capacitive load; lock out the steps on DG supply otherwise.

How Secured Engineers helps

We design the LT distribution in-house, including PCC, MCC and APFC panels, and carry electrical, fire fighting, HVAC and plumbing under one MEPF contract. CEIG, Fire NOC and DISCOM net-metering filings are prepared by our own team, so a bank sized for the solar plant and the transformer can be built and approved together. We work from offices in Noida (Delhi NCR) and Ludhiana, on 535+ projects across 18+ states, with 89.77% repeat clients.

Send 12 months of bills and the incomer log and we will review your file: the monthly power factor, the bank size you need and the harmonic risk. Start from our page on LT panels, PCC, MCC and APFC, then message us on WhatsApp, call +91 70099 85817, or ask for a free proposal.