Let
- \$R_C\$ and \$C\$ be the resistance and capacitance of our capacitor, respectively
- \$R_L\$ and \$L\$ be the resistance and inductance of our load, respectively
Then
- \$Z_C = R_C + \frac{1}{j\omega C}\$ is the impedance of our capacitor
- \$Z_L = R_L + j\omega L\$ is the impedance of our load
As you know, the purpose of power factor correction is simply to decrease our apparent power usage, making it equal to (ideally) our real power usage.
The problem with series capacitors
With a series capacitor, the voltage seen by our load would become
$$V_L = V_S\left|\frac{Z_L}{Z_C + Z_L}\right|$$
But, to prevent overvoltage/undervoltage problems (among other things!), we must ensure that
$$V_L = V_S \Longrightarrow \left|Z_C+Z_L\right| = \left|Z_L\right|$$
which, thereby, defeats the whole point of power factor correction altogether! That is, since our total impedance stays the same as before, we still end up drawing the exact same amount of apparent power as before! So, we win absolutely nothing with this approach to power factor correction.
The benefit of parallel capacitors
With a parallel capacitor, our load always sees the full voltage \$V_{S}\$ anyway.
So, to correct the power factor, an ideal parallel capacitor will simply make
$$\operatorname{Im}\left(\frac{Z_CZ_L}{Z_C+Z_L}\right) = 0 \Longrightarrow C=\frac{L}{\left|Z_L\right|^2}$$
for a new total impedance of
$$\left|\frac{Z_CZ_L}{Z_C + Z_L}\right| = \frac{\left|Z_L\right|^2}{R_L} > \left|Z_L\right|$$
which means we'll draw less apparent power than before -- thus, satisfying the objectives of power factor correction!
But, what about real capacitors?
Even though all real capacitors have some \$R_C > 0\$, the above calculations should be still be valid as long as \$R_C \ll \left|Z_L\right|\$.
But, even with high values of \$R_C\$, there is still value in doing power factor correction! The only difference is that now we're no longer seeking a power factor of 1 ("unity"), since now we also have to take into account the real power usage of our "real" capacitor as well.
So, for a capacitor with a large \$R_C>0\$, we would make
$$C_{real} = \frac{\left|Z_L\right|\sqrt{\left|Z_L\right|^2+4R_C\left(R_C+R_L\right)}-\left|Z_L\right|^2-2R_CR_L}{2w^2R_C^2L}$$
The resulting total impedance will still be greater than our original \$\left|Z_L\right|\$, and, consequently, our apparent power usage still gets reduced!
Furthermore, note that
$$ \lim\limits_{R_C\to 0} C_{real} = C_{ideal} = \frac{L}{\left|Z_L\right|^2}$$ is also the same value as we had calculated for an ideal capacitor before.