In electrical power system, power factor is very important parameter that defines how efficiently electrical power is being utilised by the connected load. It is unitless quantity. Power factor of system depends on the type of load connected, wheather resistive, inductive or capacitive.
In this article we are going to discuss what is power factor and why it is important in electrical system. Also what is the physical significance of power factor in power system. But before that, we have to understand the basic concepts of Electrical power and brief analysis of Active, Reactive and Apparent Power, so that it will be easy to understand the concepts of Power Factor. Because the concepts of power factor are derived from Electrical power concepts. We have already discussed the concepts of Electrical power (Active, Reactive and Apparent Power) in our previous Article.
Well, now coming to our main topic which has mainly two parts. First, what is power factor? And other is why it is important?
So let’s discuss it one by one in detail so that it will be easy to understand.
What is Power Factor..?
Power factor is the measure of evaluating how effectively the incoming electrical power is used in an electrical system. If the power factor is high, then we can say that more effectively the electric power is being used in an electrical system.
A load with power factor of 1 results most efficient loading of the system. But if the power factor is poor (say less than 0.8), then the effectiveness of usage of electrical power reduces which results in higher losses in the supply system and a higher bill for consumers.
Power factor represents the fraction of the total power that is used to do the useful work. The other fraction of electrical power is stored in the form of magnetic energy in an inductor or electrostatic energy in the capacitor.
A high power factor benefits consumers and Power Company both. Whereas Low power factor indicates poor utilization of Electrical Power and it penalize consumers.
In Electrical Engineering the concept of power factor is only discussed in AC circuits. Whereas there are no power factor concepts in case of DC circuit due to its Zero frequency. Its value becomes 1 (unity) for DC Circuit. But in the case of AC circuit, the absolute value of Power Factor always lies between the ranges to 1 (0 < Cosθ < 1).
Generally a high and leading PF is preferred in the Electrical system. Ideally the minimum and maximum value for PF becomes 0 and 1 respectively. But in Practically, it is very difficult to achieve unity (1) power factor.
A low power factor is generally the result of inductive loads such as Induction motors, Power transformers, ballast in the luminaire, a welding set or an induction furnace. Power factor value near to 0.9 is considered as satisfactory. It is calculated with the help of Power Triangle.
Power Factor Definition
There are three ways to define power factor in electrical engineering.

Power factor is defined as the ratio of Active Power (kW) to Apparent Power (kVA).
P.F = Active Power(kW) / Apparent Power (kVA)

Also Power factor is the cosine of the phase angle difference between voltage and current pharos.
P.F = Cosθ
Where θ is the angle between V and I.

One more way of defining the Power Factor is, It is the ratio between resistance (R) and Total Impedance (Z) of AC circuit.
PF = Resistance/Impedance = R/Z
Why Power Factor is Important?
It is a very common question comes in our mind that “why Power Factor is important in Electrical System?” What is its physical significance?
To understand this let’s consider an example.
An Electrical machine runs at 100 kW (Working Power) and the Apparent Power supplied by Power utilities is 125 kVA. Then the first question arises in our mind is why the working power of machines and power supplied by the Power company is different?
Well, there is a concept of Power Factor behind that. So we have to understand it clearly. Here if we find the PF, we divide 100 kW by 125 kVA (according to the definition of Power Factor), then we got a PF of 0.8 (80%).
It means that only 80% of the incoming current does useful work in the circuit and 20% is used by reactive elements in the circuit. In other words, we can say that 80% of the power is useful power which is also known as real or True Power, and the rest 20% of power is Reactive Power used by reactive element in the circuit.
Because the Electric Company must supply total apparent power (kVA) to the consumer and in return consumer pay them only for real power (kW). Due to poor PF, the consumer pays fewer amounts to Power company. It will be considered a loss for power company as well as no benefit for the consumer. So power company penalizes the consumer for maintaining the poor PF. So higher PF is beneficial for both power utilities as well as consumers.
Problem with Low Power Factor
It can be observed that an increase in reactive power causes a corresponding decrease in Active Power as well as power factor. It means the power distribution system is operating less efficiently because not all the current is performing useful work in the circuit. For example, a 50 kW load with a power factor of unity (Reactive power = 0 kVAR) could be supplied by a transformer rated for 50 kVA. However, if the power factor is reduced to 0.7 (70 %), then the transformer must also supply additional power for the reactive load.
So In this example, a larger transformer which is capable of supplying 71.43 kVA (50/0.7) would be required. In addition to that, the size of the conductors would have to be increased to supply an increased amount of current due to low PF. So due to poor PF the cost of equipment also increased.
Types of Power Factor
There are three types of power factor in electrical science. These are leading power factor, Lagging power factor and Unity power factor. Let’s discuss all these types of power factor one by one in detail.
1. Leading Power Factor: A leading power factor signify that the load in the circuit is capacitive in nature. As the load supplies reactive power to the circuit, therefore in this case the reactive component (Q) of Electrical power will be negative. If in the electrical circuit there is more capacitive reactance than inductive reactance, then PF of the circuit will be leading power factor. In this case, the operating current will lead the voltage phasor by an angle θ. whereas in pure capacitive circuit current leads the voltage by θ = 90 degrees.
2. Lagging Power Factor: A lagging power factor signify that the load in the circuit is inductive. As the load will consume reactive power, therefore in this case the reactive component (Q) of Electrical power will be positive. If in the electrical circuit there are more inductive reactance than capacitive reactance, then PF of the circuit will be lagging power factor. In this case, the operating current will lag the voltage phasor by an angle θ. Whereas in pure inductive circuit current lags voltage by θ = 90 degrees.
3.Unity Power Factor : A unity power factor signifies that the load in the circuit is purely resistive. As the load will consume active power, therefore, in this case, the reactive component (Q) of Electrical power will be zero. Hence in case of a unity power factor, total apparent power will be utilized in the circuit. In the electrical circuit, if inductive reactance and capacitive reactance balance each other, the circuit will be in resonance condition and considered as purely resistive hence PF of the circuit will be unity power factor. In this case, the operating current will in phase with voltage phasor. In this case θ will be 0 degrees.