Power factor is the ratio between real power (useful power) and apparent power (total power) in an AC circuit. It indicates how efficiently electrical power is being used and is one of the most critical metrics in industrial and commercial electrical systems today. When your power factor is low (below 0.95), you're essentially paying for electricity that isn't doing useful work. Many utility companies even impose penalties for low power factor because it creates extra burden on their generation and distribution systems.
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