There are a number of products offered over the internet that claim to reduce your electric bill by correcting the power factor in your home. They are known by different names such as KVARs or Power Saver Devices. People often ask if correcting power factor will reduce their electric bill. Well, it is true that power factor correction reduces the overall current consumed by your home and accordingly reduces the apparent power, or kVA. However, currently in U.S. residential customers are not billed by kVA-hour usage.

For now, we pay solely for consumed energy, i.e., for kilowatt-hours. By the way, this is the only thing the old fashioned rotary meters can measure. Technically, lowering AC current will slightly reduce losses in the cables between your utility meter and the point of PFC connection, but this effect is negligible. By and large, improving PF and lowering reactive current practically does not affect your meter reading. In theory, these things will change if domestic tariffs will include kVAh for the customers with smart meters. At present it sounds unlikely though. More likely utilities will set different rates for electric usage during different time of day to encourage off-hours usage. Of course, electric companies do benefit from reduced reactive power. So, you can always choose to install a PFC device if you want to help your utility at your own expense. However, if you do this, you would first need to determine your home's reactive power in order to select the right amount of PFC capacitors. Buying a standard part without knowing your requirements can do more harm than good.

Another frequently asked question is "should I buy a computer or electronics with built-in power factor correction?" Well, as we explained above, PFC does not lower your bill. Actually, active PFC slightly reduces efficiency of power supplies because of the addition of an extra conversion stage. So, other things being equal, your electric consumption may actually go up. However, PFC in electronics does offer certain technical benefits. Particularly it increases the amount of watts we can draw from a wall outlet.

Let's consider the following example. A standard outlet NEMA 5-15R found in almost every U.S. household is rated at 15A. Since electric code requires 80% derating, we can draw up to 12A continuously from such an outlet. If our load has PF=1 (like in portable space heaters or light bulbs), this gets us up to 120Vx12A=1440 W. However, if for example, PF=0.7 (like in old PCs with non-PFC power supplies), we could get only up to 120Vx12Ax0.7=1008 W, which is 30% less. Similarly, circuit breakers are affected by net current rather than by real wattage. If you have several receptacles fed from the same breaker, devices with PFC may allow you to draw some 30% more watts.

Another advantage of the devices with built-in active PFC is they can operate at any voltage found worldwide. That's why they don't have "115/230V line select" switch, which is present in most older units. So, you don't have to worry about setting the switch into a wrong position, which can fry your PSU. Since PFC feature usually costs extra, it's up to you to decide if it's worth it or not.

NIST demystifies power saving devices.