# Power Factor and Power Quality

> Reactive power, penalty clauses, capacitor sizing and the discounts hiding at higher voltage.

Reactive power does no useful work and still has to be carried by the wires, which is why utilities bill for it. A low power factor shows up as an explicit penalty line, as a kVA-based demand charge, or as a multiplier applied to billed kilowatts, depending on the tariff — and the three are not equivalent, so a correction that pays back on one schedule may not on another. This section covers the power triangle, how to read a power factor penalty clause, capacitor bank sizing and the harmonic risks that come with it, active correction, and how variable frequency drives interact with displacement power factor. Also here: voltage level discounts, transformer ownership credits, and what primary metering changes on the bill.

## Articles in this section

- [Power Factor Penalties Explained](https://thedemandcharge.com/articles/power-factor-penalties-explained): Reactive power does no useful work and still has to be carried by the wires. Three different tariff mechanisms bill you for it, and they are not equivalent.
- [Harmonics, Resonance and Why Capacitors Sometimes Make It Worse](https://thedemandcharge.com/articles/harmonics-and-capacitors): Adding capacitance to a system full of drives can create a resonant circuit that amplifies the very currents it was meant to be indifferent to. Check before you order.
- [Sizing a Capacitor Bank](https://thedemandcharge.com/articles/power-factor-correction-sizing): The calculation is short and the target is not maximum correction. Sizing to land inside a band, with the harmonic environment checked first, is what separates a working installation from a failure.
- [Variable Frequency Drives and Displacement Power Factor](https://thedemandcharge.com/articles/vfd-power-factor): Drives are frequently sold as improving power factor, and in one sense they do. The sense that matters for your bill depends on which power factor your meter measures.
- [Voltage Level Discounts and Primary Metering](https://thedemandcharge.com/articles/voltage-level-discounts-primary-metering): Taking service at a higher voltage and owning your own transformer moves cost from the utility to you, and tariffs pay for that with a discount. Whether it is worth it is arithmetic.
- [kVA Billing and kW Billing](https://thedemandcharge.com/articles/kva-vs-kw-billing): Two tariffs can charge for demand in different units, and the choice of unit decides whether a capacitor bank is a strong investment or a complete waste.

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