Energy & Sustainability worked example

Power Factor Penalty at 110% share of demand penalized: a worked example

This scenario runs the power factor penalty calculation on the strong side: 110% share of demand penalized, with every other input held at its documented default. a utility or facilities manager needs to estimate monthly or annual power factor penalty exposure

The inputs for this scenario

  • Penalized billing demand: 640 kW (unchanged)
  • Utility penalty rate: 4.75 $ / kW (unchanged)
  • Share of demand penalized: 110 % (raised for this scenario; the documented default is 100)
  • Fixed power-quality service charge: 250 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Variable power factor penalty = affected billing demand × power factor penalty rate × penalty applicability) to the inputs above produces each figure below.
  • At this operating point the engine returns 3,594 $ for total power factor penalty, the number this scenario is built around.
  • At this operating point the engine returns 5.62 $ / kW for penalty per affected kw.
  • At this operating point the engine returns 3,344 $ for variable power factor penalty.
  • At this operating point the engine returns 250 $ for fixed power-quality service cost.

How this compares with the baseline

  • Against the tool's baseline example, where share of demand penalized sits at 100% and the headline result is 3,290 $, this scenario comes in 9.24% above the baseline at 3,594 $.
  • Use it to validate a utility penalty line, build the payback case for capacitor banks or PF correction, and forecast the savings from raising power factor above the threshold. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Total power factor penalty: 3,594 $ (headline result)
  • Penalty per affected kW: 5.62 $ / kW
  • Variable power factor penalty: 3,344 $
  • Fixed power-quality service cost: 250 $

Run it with your numbers

  • Every input above is editable in the live Power Factor Penalty calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.