Power Factor – What your business needs to know

Large businesses consume high levels of energy, which means that power costs are a major business overhead. The good news is that installing a simple unit can help. The answer is in understanding your power factor ratio.

If you own or manage a large business1 then the term Power Factor should be one you’re familiar with. Understanding the term could help you lower your business’ demand charges, and therefore, your running costs.

The good news is that reducing these costs is achievable with the correct expert advice.

Speak to a dedicated business expert today. Call us on 13 23 34

“Understanding your business’ power factor ratio means you could better manage these charges, and reduce your business’ demand charges.”

When did Power Factor become important?

Many network providers have started to charge large businesses for the demand they place on the electricity grid, as well as their daily energy use. This means that if you have a kVA charge (kilo-volt-ampere) on your energy bill, then Power Factor is important to what your business pays for electricity. To check if you have a kVA charge check your most recent bill.

Your Power Factor ratio can range from zero to one.

What should a business’ Power Factor be?

As an example, a Power factor of 0.5 means that 50 per cent of power supplied is active power, and 50 per cent is reactive. Your business’ aim should be to lower its reactive power, which will save on demand charges.  

In technical terms, Power Factor is the ratio of your real power (kW) divided by the apparent power (KVa) to be supplied. 

“In technical terms, Power Factor is the ratio of your real power (kW) divided by the apparent power (KVa) to be supplied.” 

Can I improve my business’ Power Factor ratio?

Yes. By installing a Power Factor correction unit, your business can start to work more efficiently and reduce its demand charges. Installing a Power Factor correction unit is a simple process for most businesses, and is something Origin can provide a solution for.

Purchasing a Power Factor Correction Unit

The initial outlay for the unit is usually balanced out by business savings often less than three years by the average large commercial. If this isn’t the case for your business, Origin’s expert team will advise.

For more information on how a Power Factor correction unit could help your businesses reduce its energy use, call a dedicated Origin Business consultant on 13 23 34 or email us.

Find out how a Power Factor correction unit can help your business

Call an Origin Business expert on 13 23 34


1. Large business customers determined by 100 MWh per annum usage or spending upwards of $30k.

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