Power factor improvement essentially modifies the ratio of active power (which is work done) to reactive power (which is the power that moves back and forth) of an electrical system thereby compensating for transformer's coil inefficiencies in an electrical network. As the power factor goes low, the system will be consuming more reactive power which is ineconomical in terms of the energy consumptions costs. With the installation of power factor correction devices like capacitors, businesses can neutralize the impact of inductive loads and therefore move the power factor closer to the unit value. This, in turn, not only improves the operating economy of the electrical system, but also reduces the total load on the power supply, which in the end brings about cost savings and efficiency in operations.