It is the capacity of lamps to output active power.
A measure of how effectively electrical power is being used, power factor is the ratio of the real power to apparent power and represents how much real power electrical equipment utilizes.
It is always between 0.0 and 1.0, and commercial installations with a low power factor and on a kVA tariff will have a greater energy consumption than a similar installation with a high power factor.
How Much Energy Is Really Being Used?
Power is the measure of energy transmission rate; it is the product of voltage (V) and current (A) in direct current (DC) circuit.
Power Factor (PF) =Active Power (W)/Apparent Power (VA)
However, in an alternating current (AC) circuit, it is much more complicated. AC power contains three components:
Real (Active) Power - measured in watts
Apparent Power - measured in volt-amperes
Reactive Power - measured in reactive volt-amperes
Imagine there is A Cup of coffee Power
The coffee cup represents active power.
The milk represents reactive power.
The entire contents within the cup represent the apparent power.
The more milk in the cup, the lower the strength of the coffee. In other words, the more reactive power, the less efficient the lamp!
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