A: Power factor is low in industrial settings where most of the plant energy is used to power electric motors. It is lowest when the induction motors tend to be over-sized and under-loaded. A lagging (less than 1.0) power factor causes some additional energy loss because more current is required – compared to an in-phase sinusoidal current – to deliver a certain amount of power. Correcting power factor can be an appropriate and cost-effective measure, but not because of energy savings.
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