Motors, transformers and many industrial loads draw reactive power as well as useful power. Power factor is the ratio between the two: the closer to 1, the less wasted current your supply has to carry.
A low power factor means higher current for the same useful work. That heats cables, uses up transformer capacity and can attract utility penalties.
An automatic power factor correction (APFC) panel switches capacitor banks in and out as the load changes, keeping power factor near target. Sizing and detuning need a proper load study, especially where harmonics are present.
This note is general information, not instruction for do-it-yourself work. Electrical work must be done by qualified persons following applicable laws and standards.
