The power factor is the ratio of the active power to the apparent power.

It is determined by the phase difference between the voltage and current, which arise due to the presence of reactive elements in the circuit.

An analogy can be drawn with a glass of coffee, where the coffee symbolizes the useful active power, and the foam represents the reactive power, which, despite not performing real work, is utilized in certain appliances.

The cost covers the entire glass. For maximum value, the reactive power should be reduced to bring the power factor close to unity.

For a purely resistive load, in-phase voltage and current yield a unity power factor, where apparent power equals active power.

For a purely reactive load, the power factor is zero, implying the active power is zero.

Between these extremes, the power factor is either leading or lagging. A leading power factor indicates that the current leads the voltage, implying a capacitive load.

A lagging power factor signifies that the current lags behind the voltage, indicating an inductive load.