When to use: Use when a facility has a low power factor (typically caused by motors, transformers, and fluorescent lighting) and the utility is charging a power factor penalty or demand charges. Poor power factor increases apparent power (kVA), requiring larger conductors, transformers, and switchgear. A capacitor bank supplies reactive power locally, reducing the reactive current drawn from the utility. Most utilities target PF ≥ 0.95 to avoid penalties.