kW (Kilowatt) is the unit of Real Power that does useful work. kVA (Kilovolt-Ampere) is the unit of Apparent Power, which is the total power delivered to a circuit. kWh (Kilowatt-hour) is the unit of energy, which is the amount of power consumed over a period of time.

A low Power Factor means the business is drawing more total current (kVA) than it needs for the useful work it’s performing (kW). Utility companies may charge a penalty for this inefficiency, which can significantly increase electricity bills.

A Power Factor of 1.0 means your electrical system is perfectly efficient, with all of the apparent power being converted into useful real power. This reduces stress on your equipment and can lead to lower energy costs.

Most home appliances (like a toaster or light bulb) that perform direct work are rated in kW. Equipment with reactive components like motors, transformers, or large computer servers are often rated in kVA because they have to handle both real and reactive power.

The Power Factor can be measured using a power quality meter. It can also be calculated if you know the real power (kW) and apparent power (kVA) of the system: Power Factor = kW / kVA.