Power factor is a measure of how efficiently certain equipment makes use of the electricity network.
Some types of equipment, referred to as “inductive loads”, such as electric motors and fluorescent lights, draw more current from the electricity network than they need to perform the useful work they are designed to do. These additional currents are out of phase with the supply voltage and perform no useful work, but are required to maintain the magnetic fields within the devices. This means you end up paying for more power than you actually need.
The concept is expressed as the ratio of power consumed (kW) to current flow required (kVA). A power factor of 1.0 is perfect. A power factor of 0.8 means the useful work being done is 80% of what could be done with the same power and a perfect power factor.
Power factor correction can bring low power factor installations closer to a power factor of 1.0.