One of the most significant changes in the power quality industry in the past five years has been the method of selling power quality (PQ) solutions. Originally, PQ solutions were sold as an insurance policy to avoid potential damage from power disturbances, such as transients, voltage sags, interruptions, or harmonics. Today, many PQ solutions providers have found it more effective to promote energy cost reduction associated with their products rather than to deal with the soft savings associated with minimizing downtime or reducing damage to electrical equipment. The problem is some of these solutions providers have significantly overstated the savings. While these solutions can provide excellent protection, they often provide very little, if any, energy savings.

Energy conservation

Power quality and energy conservation are topics that are often commingled in papers and at industry conferences. There are typically two reasons for this. First, loads used to conserve energy (e.g., adjustable-speed drives and compact fluorescent luminaires) typically impact power quality. Second, energy conservation and power quality often involve end-user concerns where electric utilities or the government take a leadership role in promoting new technologies or mandating technologies. Because these topics are often considered together, there is opportunity for confusion and misleading information regarding actual energy savings. There are generally two categories of PQ solutions that claim to save energy:

Power factor (PF) correction equipment:

  • Black/green boxes that contain capacitors and metal-oxide varistors

  • PF correction capacitors

  • Harmonic filters

Wasted energy

Other power quality solutions:

  • PF correction

    Negative sequence current reduction

  • Confusion on the sales front

    Neutral blocking filters

  • Surge protective devices

  • Soft starters

  • Zig-zag reactors

  • Harmonic mitigating transformers

  • Conservation voltage reduction equipment

The first category, PF correction equipment, includes the most common solutions that provide real opportunities for savings. These solutions can provide energy bill savings, some of which are significant. However, the actual savings are generally a result from reduction in penalties, not real kW or kWh savings. The second group, other PQ solutions, generally offers much less or no real savings. However, these solutions are often promoted to offer significant savings in an effort to achieve a quick return on investment.

PQ testing

The Electric Power Research Institute (EPRI), Palo Alto, Calif., has evaluated many of the claims of potential energy-savings devices and makes the seemingly obvious observation: “You can only save energy that is wasted,” meaning that power required to do work cannot be eliminated from your electric bill no matter what you do (short of applying a generator or source of energy locally). This statement is especially appropriate with the PQ solutions that claim to save energy.

If a device saves all of the “potential” energy on a power system that it could, it can only save the energy that's wasted in losses throughout the system. Therefore, with typical system losses between 1% to 4%, devices that eliminate these losses can only reduce your bill by 1% to 4% at best. Obviously, energy conservation methods (turning off the lights) and purchasing loads that require less work/energy (compact fluorescent luminaires) are valid methods of saving real kW on your energy bill.

Can capacitors and other PF solutions help you save a significant amount of money on your electric utility bill? Absolutely! If you have a PF penalty, you can save somewhere between 10% to 30% of your electric bill and realize a one- to two-year payback on your investment. However, not every electric utility charges a penalty for poor PF. If they don't, it's still possible to save money — but usually less than if you faced a penalty.

Various sales methods are used in order to promote savings involved with applying PQ solutions. One of the methods is to claim significant benefits associated with the equipment related to the payback. Many are so-called “hard-savings,” while others are “soft-savings” that are associated with a side benefit of the solution. Although many of these savings are real, they are often significantly overstated.

Hard-savings include:

  • Reduced energy (kWh) usage

  • Demand reduction (kW)

  • Improved PF

  • Reduction in taxes

  • Reduction in I2R in conductors

  • Reduction in equipment losses (motors, transformers, etc.)

  • Operating cost reduction

Soft savings include:

  • Reactive power savings (kVAR)

  • Apparent power savings (kVA)

  • Lengthens electrical equipment life

  • “Enhances” electrical equipment life

  • Improves “performance” of equipment

  • Protects sensitive electronic equipment

  • Reduces equipment replacement parts

  • Reduces required maintenance

  • Space savings

  • Don't have to oversize equipment (generators, etc.)

  • Less HVAC required for removal of heat

  • Protects the environment by reducing generation, emissions, and waste

  • Improves safety

Power quality solution providers use one or a combination of the following energy savings selling techniques:

  • Confusing percentages — You can actually reduce the losses in a transformer and make your system more efficient by replacing a transformer with 97% efficiency with a transformer with 97.8% efficiency. This is obviously a 0.8% increase in efficiency. You could also claim that you have reduced your losses by 27%. Saving 20% to 30% of losses (when the losses are 2.2% to 3.0% of the full load of the transformer) is not equal to saving 20% to 30% of the total energy used by the load.

  • Revenue grade metering — Without using revenue grade metering (including CTs and PTs, where applicable), small inaccuracies in measurements can translate to large overstated claims, especially under conditions where the load on a transformer, for example, is much less than 50% (a typical situation). This means that the difference in current or kW with and without the corrective equipment may be less than 1% of the full load capability. For example, if the load on a 75kVA transformer is 15.1kW and the measured load with the corrective equipment in service is 14.7kW, this 400W difference may seem significant but may be partially due to phase shift errors in the CTs, especially when harmonic currents are involved.

  • Inappropriate measurement duration — Taking a single snapshot or averaging a very long measurement are both opportunities to hide the truth in the numbers. The method that results in the highest “proven” savings is usually used regardless if, in reality, the savings are actually realized.

  • The use of kVA versus kW is an easy method for a rep to make claims of significant improvement — Equipment that corrects the PF is capable of significantly improving the kVA, but has minimal effect on kW. It is not unrealistic to see a 20% savings in kVA for a poor PF load, but the actual energy savings is much less than 5%. Unfortunately, a majority of U.S. electric utilities bill on kWh and kW demand. Simple PF correction methods (including harmonic filters) are generally the least expensive and practical method of improving the PF for those instances where kVA rates are enforced.

Power quality labs throughout the country continue to test PQ equipment and systems, such as capacitive devices, harmonic filters, surge protectors and black box combination solutions. In addition, tests have been performed on harmonic mitigating transformers and uninterruptible power supply solutions in an effort to determine what opportunities exist for energy savings based on design and harmonic loading.

Figure 1 (click here to see Fig. 1) shows the results of a test performed at one such lab, where a 75kVA transformer was subjected to 100% linear, resistive load and then to a 100% harmonic load (computer power supplies). This Figure clearly shows that transformer losses, in this case, increased loading by 1% across the loading of the transformer. These results indicate there are some savings available to end-users by reducing harmonic currents on the power system.

Figure 2 (click here to see Fig. 2) shows a comparison of various transformer types subjected to 100% harmonic load. Note the significant difference between the losses in an energy-efficient (TP-1) and K-rated transformer versus a harmonic mitigating transformer. These tests indicate there is a significant savings associated with the use of harmonic mitigating transformers. Again, the savings are not 25% of the total load, as some vendors may advertise. However, they are a steady 1% to 3%, which will easily pay for the transformer many times over the life of the unit.

Figure 3 (click here to see Fig. 3) illustrates testing and modeling results of a power system where PF capacitors were applied, illustrating the savings that can be achieved versus investment in kVAR compensation.

Table 2 (click here to see Table 2) Summary of Claimed Savings vs. Realistic Savings

As we have discussed, there are many opportunities to save money by applying PQ solutions, many of which provide some amount of energy savings and other savings opportunities beyond their primary intention. However, it's important to carefully investigate overstated marketing claims made by some manufacturers. Extreme energy savings claims can often be overstated by an order of magnitude (10 times or more), so do your homework before making that purchase.

Carnovale is the Power Systems Experience Center Manager for Eaton's Electrical Sector. He can be reached at Hronek is a senior energy consultant for Eaton's Electrical Sector. He can be reached at

Editor's Note: The original version of this article ran in “Energy Engineering,” Vol. 106, No. 3, published by the Journal of the Association of Energy Engineers, copyright 2009 Association of Energy Engineers,