Power Factor Penalties

Larger energy users may be penalised for a poor Power Factor.

The surcharge may appear under Network Costs on your bill as a 'demand' charge, 'reactive power' charge, 'peak load' charge, 'kVAr' charge, 'use of systems' charges or 'availability' charge. The unit of measurement is kVA.


These surcharges are set by the networks rather than retailers, so they are generally not negotiable.

If your bill shows any of these types of demand charges measured in kVA, you should investigate your Power Factor further.

Call your energy retailer and find out what your Power factor is. They may not be able to tell you immediately, but should come back to you.

Your retailer should also be able to determine whether installation of a Power Factor Correction Unit is necessary, what size it should be, and suggest suitable suppliers to contact.

Typical payback periods for Power Factor Correction Units are 2-3 years.

Last Updated: 
Thu 06/06/2013

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