A capacitor panel maintains the power factor of the system automatically by switching the capacitor banks as per the needs of the system. Normally, an APFC relay along with a bank of capacitors, contactors and circuit breaker are the switchgear components used in the designing of the panel.
Power factor is the ratio of apparent power over true power. It is 1, if the load is purely resistive, such as in a toaster, but it is less than 1 if the load is reactive, such as in a motor. This is because current is not in phase with voltage in that case. Inductive loads cause the current to lag voltage, and capacitive loads cause the current to lead voltage. Placing capacitors across an inductive load tends to compensate for the lagging power factor.
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