Q: How much energy can be saved by installing correction capacitors?

A: Power factor correction does not save much energy – usually less than 1 percent of load requirements – but even that benefit depends upon how low the power factor is to begin with and how heavily loaded are in-plant distribution system conductors. Note that power supplied to your motor driven-equipment is
proportional to Volts × Amps. Energy losses in your in-plant distribution system coincide with your voltage drop. If your transformer supplies power at 480 volts and the voltage at your motor terminals is 470 volts, you have a voltage drop of 10 volts, or approximately 2 percent of 480 volts. The total power loss in the in-plant distribution system upstream of connected load equipment seldom exceeds 2 percent of the load requirement.
The loss fraction saved through the installation of capacitors at the motor is:

If your original power factor was 80 percent, and the system power factor is raised to 95 percent following the installation of capacitors, then the resistance or I2R losses in your in-plant distribution wiring will drop by 29.1 percent. Multiplying (29.1%/100) × 2% yields an expected energy savings of 0.58 percent of the load requirement. If you correct power factor at the switchyard or plant service entrance instead of very near the inductive loads (e.g. motors), you do not reduce in-plant distribution system losses at all because the correction only happens on the line side (the upstream, utility side) of where the capacitors are tapped in.

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