Power factor is the ratio of actual power to apparent power. A low power factor means more current is needed to deliver the same amount of useful power, resulting in higher costs. Power factor can be corrected by installing capacitors to offset the reactive power drawn by inductive loads. Improving power factor reduces line losses, increases system capacity, lowers utility bills, and improves voltage stability and equipment lifespan. Proper sizing and placement of power capacitors is needed to boost power factor from a facility's initial level to the target level required by the utility.