The power factor of an electrical supply is the ratio of the real power to the apparent power of the supply. It is the useful power used by the load divided by the total power that is drawn. The latter includes power that is unusable, so a power factor of 1 is desirable. A low power factor would mean that the electricity supplier would effectively supply more energy than the consumer’s bill would indicate, and suppliers are allowed to charge for low power factors.
 
UNDERSTANDING POWER FACTOR
Power Factor (PF by definition is the ration of real power to apparent power
Power Factor = Real Power (Watts) / Apparent Power (VA)
 



 
 
People generally convert watts to VA (Watts = VA), which is not true unless the Power Factor of a system is 1, for the purely resistive circuit- for example, an incandescent light bulb-the power factor is 1 because the reactive power equals to zero.
Power factor can be an important aspect to consider in an AC circuit, because any power factor less than 1 means that the circuit’s wiring has to carry more current than what would be necessary to deliver the same amount of (true) power.
Let’s consider two examples with the following characteristics.

Power of Motor = 2KW, V = 250V, Current  = 12 Amp.

Power Factor Calculation is as follows

Power Factor = 2000/(250×12)
= 0.67

Now we consider the another case in which we will stabilize the voltage at 230V through servo voltage stabilizer
Power Factor = 2000/ (230×12)
                      = 0.72

From above, it is clear that with the voltage optimization we can improve the power factor which are directly affect our system and gives us a huge power saving as well as also prevent us from penalty i.e imposed by utilities due to poor power factor. Further now a day’s utilities are adhering the tariff plan on KVAH basis so improving the power factor by using servo voltage stabilizer we can also reduce our energy bills.
So it can be concluded that servo voltage stabilizer are multipurpose equipment which can provide the optimum voltage as well as also serves as a power factor correction equipment which will helps us in improving the power factor, So power factor improvement will be an additional benefit of servo voltage stabilizer which will reduce our electricity charges and also enable us to serve the nation through energy optimization. 
 
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