In the A.C power networks the total power supplied to a load is much more than the actual power consumed by a load.

The total power supplied to a load splits into two types.

(1) Actual power
(2) Reactive power

Two combination of both powers is termed as Apparent Power know as KVA.

The Reactive Power, KVAr does not do useful work & un-necessarily puts extra load on the electrical system which results in wasteful over heating of conductors & poor voltage regulator.

Utility companies impose strict regulation to limit the reactive power by improving the power factor of the system.

Adhering to the standard regulations helps save penalties & also limits the un-wanted currents which burden the system.

Installing a Power Factor Improvement (PFI) panel of correct rating & configuration is really advantageous to users of electricity.