Reactive Power: How to Avoid Penalties on Your Electricity Bill
What is reactive power and why does it affect your bill?
Reactive power is a part of electricity that electrical equipment consumes but that is not turned into useful energy. Even though it isn’t used directly, it overloads the grid and causes losses in the installation.
Distribution companies penalise excess reactive power on the electricity bill, which can mean an increase of up to 30% in monthly costs.
How do you know if you’re paying reactive power penalties?
To find out whether you’re paying this surcharge, check the reactive power section of your electricity bill. If you see items such as:
- Reactive power penalty
- Power factor surcharge
- Excess reactive consumption
you probably need a solution to reduce these costs.
How to avoid reactive power penalties
Installing capacitor banks
Capacitor banks eliminate reactive power and optimise electricity use. With them, you can avoid up to 100% of the penalties on your bill.
Maintaining electrical equipment
Old or poorly maintained equipment generates more reactive power. It’s advisable to check motors, transformers and electrical systems.
Optimising the power factor
The power factor should be as close to 1 as possible. With capacitor banks and adjustments to the installation, this parameter improves and costs go down.
How much can you save by eliminating reactive power?
The savings depend on consumption and the penalty applied. Here are a few examples:
| Monthly consumption | Penalty without correction | Savings with capacitor banks |
|---|---|---|
| 10,000 kWh | €250/month | €200/month |
| 50,000 kWh | €1,200/month | €1,000/month |
The return on investment of a capacitor bank is usually between 6 and 18 months, depending on the level of penalty.
Frequently asked questions
Do all companies pay reactive power penalties?
No, but if you have high consumption with motors, industrial lighting or machinery, your company is likely paying surcharges.
How much does it cost to install a capacitor bank?
The cost ranges between €800 and €5,000, depending on the size of the installation.
Is correcting reactive power mandatory?
It isn’t mandatory, but it reduces your electricity spend and improves energy efficiency.
How do I know which capacitor bank I need?
It’s advisable to carry out an energy study to determine the optimal capacity.
Cut your electricity costs with Renovae Energy
At Renovae Energy we help you eliminate reactive power and reduce penalties on your bill. Request a free study and optimise your electrical installation.