Client is a food processing plant getting hit with $1,800/month in power factor penalties on their Georgia Power Schedule TOU-GSD rate. Their PF runs 0.78-0.82 consistently. They're asking if installing correction capacitors is worth it vs. just paying the penalties. Anyone done the math on similar situations?
Power Factor Penalties - Worth the Correction Equipment?
Omar, it really depends on the payback period they're comfortable with. Capacitor banks for that size operation usually run $15-25K installed. At $1,800/month penalty, that's roughly 10-14 month payback, which most manufacturers find acceptable. Plus you get some demand reduction benefits too.
Had a similar case with a chemical plant on Duke's Schedule LGS. Power factor penalties were $2,300/month, installed automatic capacitor switching for $31K. Payback was 13.5 months and they also saw about 3% reduction in peak demand charges. Definitely worth it in most cases.
Good discussion here. One thing to watch out for - make sure they size the capacitors properly. Over-correction can lead to leading power factor penalties that are just as expensive. Also check if Georgia Power offers any rebates for power factor correction equipment - many utilities do.