What is Power Factor: the Iced Tea Analogy

Imagine a glass of Iced Tea: the drink itself is the "real power" you want (kW), or what actually does the work. The displacement caused by ice is the reactive power (kVAR), necessary to chill but not for drinking. Power factor correction acts like a de-icer, minimizing the kVAR and maximizing the kW you pay for. The result? A more efficient system and less wasted energy.

About Energy Efficiency Group:

Energy Efficiency Group is a Power Factor Correction consultant company based in Cincinnati, Ohio. Though we are based in Cincinnati, we have a national (and limited international) reach. We exist to partner with manufacturing, industrial, warehouse, offices, schools, processing facilities, as well as hotels, resorts, theme parks, zoos, etc. Any facility with that features “a lot of moving parts” is a potential candidate to focus on sustainability efforts.  Even if your facility installed 100% energy efficient components- most of these are not manufactured by the same companies and not designed to “work together.” Meanwhile, they may be energy efficient on their own, as a whole they may be working against each other causing inefficiencies. Energy Efficiency Group is partnered with Indianapolis-based Global Energy Solutions Group (GESG) which holds multiple US patents on Power Factor Correction equipment. 

Power Factor Correction

Power Factor Correction (PFC) is often misunderstood and, therefore, overlooked as a cost-savings measure. PFC ensures you are only billed for the actual usable power your company consumes, and not the extra energy wasted on inefficient delivery. This translates to lower electricity costs and a healthier electrical system for your facility.

Machine Tool Facility

A $8,387 client investment in power factor correction yielded an impressive 9-month Return on Investment. With annual energy savings of $10,600, savings are projected to reach $53,000 over 5 years.

Hospital Complex

A recent medical client's investment of $222k in Power Factor Correction yielded $241k in annual savings, leading to an 11-month Return on Investment. Projected 5-year savings are estimated at $1.2 million.

Case Studies

School Building

A Cincinnati area school invested $25,693 in a Power Factor Correction unit, resulting in $22,400 annual savings and a payback period of less than 14 months. Over 5 years, the school expects to save $112,000.

Video Library

A picture may be worth a thousand words, but a video may be worth thousands of dollars.


The energy industry uses a lot of terms, phrases, and abbreviations; you’ve probably seen a few of them on your energy bill.
This glossary provides clarity to find the best energy plan for your business.

A practice that allows marketers and local governments to pool the electric or natural gas consumption of multiple customers, or residents as in the case of local governments, in order to purchase the electricity or natural gas at a bulk rate.

The electrical generation resources, transmission lines, and interconnections with neighboring systems, and associated equipment, generally operated at voltages of 100 kilovolts (kv) or above.

The capability to generate electrical power, usually measured in megawatts (MW) or kilowatts(kW).

The carrier owns the pipes and wires through which the energy flows. They still need to acquire energy from an outside source before they deliver it to a home or business. Once you sign up for a plan with your new alternative energy supplier, they will connect with your local utility “carrier” who delivers the energy to your home or business.

The rate at which energy is being used (measured in kW). Measuring demand allows local utility companies to anticipate and plan for the maximum electrical needs of all users in the area. This ensures that facilities are properly sized to handle customer energy needs and that individual customers are charged fairly based on energy capacity requirements.

Displacement Power Factor is the power factor measuring only the 60 Hz angular displacement between the current and the voltage. Power factor correction capacitors can reduce this angular displacement. This measurement can be misleading if harmonics are present.

A federal law signed in 2005, the act was intended to establish a comprehensive, long-range energy policy. It provides incentives for traditional energy production as well as newer, more efficient energy technologies, and conservation.

Ideally, voltage and current waveforms are perfect sinusoids. However, because of the increased popularity of electronic and other non-linear loads, these waveforms quite often become distorted. This deviation from a perfect sine wave can be represented by harmonics-sinusoidal components having a frequency that is an integral multiple of the fundamental frequency. Thus, a pure voltage or current sine wave has no distortion and no harmonics, and a non-sinusoidal wave has distortion and harmonics. To quantify the distortion, the term total harmonic distortion (THD) is used. The term expresses the distortion as a percentage of the fundamental (pure sine) of voltage and current waveforms.

The ratio of average demand to peak demand; a measure of efficiency that indicates whether a system’s electric use over a period of time is reasonably stable, or if it has extreme peaks and valleys.

The basing of a longer-term contract or rate schedule on published current market pricing of competing supplies of natural gas or alternative fuels. Also known as market-responsive pricing.

The ratio of the actual electrical power dissipated by an AC circuit to the product of the r.m.s. values of current and voltage. The difference between the two is caused by reactance in the circuit and represents power that does no useful work.

Power factor correction is achieved by the addition of capacitors in parallel with the connected motor or lighting circuits and can be applied at the equipment, distribution board or at the origin of the installation. Power Factor Correction must be sized by a Trained Professional using patented method & apparatus and installed with the correct placement to avoid the disadvantages that can occur when correction is not properly sized and engineered resulting in under or over correction.

The transfer of electric current—usually in massive or bulk quantities of power, from a power plant on an electric power system to a destination that could be hundreds of miles away. Power flow can be in either direction.

True Power Factor is properly defined as the real power divided by the apparent power. This measurement includes all frequencies, not just the 60 Hz. The challenge is to measure the true RMS VA with all the harmonics. (RMS, root mean square is a mathematical term for measuring voltage or current properly.) Capacitors cannot correct poor power factor due to harmonics except as a component of a LC filter.


Inspection and audit of your organizational structure and all energy points of entry.


Analyze Power Factor trends within your facilities over a period of time to determine effective cost savings.


Power Factor Correction Unit is custom built that will specifically address your energy consumption needs.

Return on Investment

Each organization monthly cost savings are anticipated to return your investment within 12-18 months.

Energy Tips

Industry News and Comment regarding Power Factor and how companies can make necessary corrections that will save them financial resources.

Contact us

Contact Energy Efficiency Group to schedule a complete consultation and energy audit of your facility.

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