APFC Panels and Power Factor Correction: How to Cut Electricity Costs

If your electricity bill shows a low power factor, you may be paying for more than the energy your plant actually uses. An APFC panel (Automatic Power Factor Correction panel) fixes this automatically by switching capacitor banks in and out as your load changes. For most factories it is one of the fastest-paying electrical investments available.

What is power factor?

Power factor is the ratio of real power (kW), which does useful work, to apparent power (kVA), which the supply must deliver. Induction motors, transformers and welding machines draw reactive power (kVAR) to create magnetic fields. Reactive power does no useful work, but it still flows through cables and transformers.

A power factor of 0.8 means that to deliver 100 kW, the supply must provide 125 kVA. Raising it to 0.98 cuts that to about 102 kVA.

Why low power factor costs you money

• Higher kVA demand charges where tariffs are based on kVA maximum demand.
• Penalties or lost incentives: many Indian electricity distribution companies charge for low power factor and reward high power factor. Check your DISCOM's current tariff order for the exact rules.
• Higher current means more heat and loss in cables and transformers, and less spare capacity for expansion.
• Larger voltage drop at the far end of long feeders.

How an APFC panel works

An APFC relay measures the power factor continuously using a CT on the incoming supply. When power factor falls below the set target, it switches in capacitor steps through capacitor-duty contactors (or thyristor switches for fast-changing loads). When load drops, it switches steps out to avoid over-correction and leading power factor.

How to calculate the capacitor kVAR

The required kVAR is:

kVAR = kW × (tan φ1 − tan φ2)

where φ1 is the angle of the present power factor and φ2 is that of the target power factor.

Example: a plant with a 100 kW load at 0.80 power factor, targeting 0.98:

• tan(cos-1 0.80) = 0.750
• tan(cos-1 0.98) = 0.203
• kVAR = 100 × (0.750 − 0.203) = about 55 kVAR

In practice we would select a panel of around 60 kVAR, split into steps (for example 5 + 5 + 10 + 20 + 20 kVAR) so the relay can match the load closely. At 415 V, this correction reduces line current from about 174 A to about 142 A for the same 100 kW.

Harmonics: why VFD-heavy plants need detuned panels

VFDs, UPS systems and LED lighting generate harmonic currents. Plain capacitors can resonate with the transformer at harmonic frequencies, causing capacitor failures, fuse blowing and overheating. Plants with significant drive loads should use detuned APFC panels, in which each capacitor step has a series reactor (commonly 7% detuning) that shifts the resonance below the dominant harmonics. A harmonic study using a power quality analyser is the safest way to decide.

Maintenance tips

• Check capacitor current on each step every few months; falling current means capacitance loss.
• Keep the panel well ventilated, as heat is the main enemy of capacitors.
• Inspect contactors for worn contacts and discharge resistors for damage.
• Review the APFC relay's settings when your load pattern changes significantly.

Get an APFC panel sized for your plant

AB Automation designs and builds APFC, MCC, PCC and VFD panels in-house. Share your last few electricity bills and connected load on our contact page, and we will recommend the right size and type. See also our guide to MCC vs PCC panels.