Power Factor and Its Impact on your Electricity Bills

What is Power Factor?

Power Factor is a term electricity companies use to assess how effectively their customers’ sites use the power supplied to them. Power Factor is described as being a value between 0 and 1, and the ideal PF should be between 0.98 and 1. The demand charges listed in the Network Charges section of your electricity bill usually comprise around 25% of your total bill. These charges are dependent on your site’s Power Factor. See more information on Power Factor here or visit your electricity retailer's website for more information.


Why should I fix my Power Factor?

More Network Providers are increasing their charges for sites with poor Power Factor. In Queensland last year, Energex brought in new tariffs for peak demand, and in Victoria, CitiPower and Powercor will be bringing in new tariffs from 1 July 2016 for large energy users.

In addition, many Network Providers require a minimum Power Factor of 0.8 and there may be penalties if your Power Factor falls below this. Check with your electricity retailer to find out whether penalties apply for your area or not.


How can I fix my Power Factor?

These increased fees can easily be avoided by improving your site’s Power Factor, usually by installing Power Factor Correction equipment.

Out Performers can provide a full turn-key supply and install solution for Power Factor Correction. We first do a detailed analysis of your current electricity usage to identify the impact that any new charges will have on your energy bill. We assess and track your peak demand (kVA) and identify your corresponding Power Factor, in order to determine whether or not you need to improve your Power Factor, and if it’s cost-effective for your business to do so.

If your Power Factor needs improving, we can then provide a set of solutions including (but not limited to) installing Power Factor Correction equipment which will reduce your peak demand and de-risk your future energy spend.

Power Factor Correction (PFC) equipment is typically a bank of capacitors that are housed in a cabinet about the size of a domestic refrigerator. This is usually installed in your switch room near the main switch board. If you already have PFC equipment installed, our specialists can run checks to ensure it is maintaining your site's Power Factor at optimum levels.

For more details, see Out Performers’ turn-key Power Factor Correction solution.