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I have been told that since kVA is a smaller "unit", price per kW is higher than price per kVA. I'm not entirely sure kVA and kW are not simply units as Power Factor is not really a conversion factor. But I could be wrong in my interpretation. Can someone please confirm this logic? Thank you.

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    \$\begingroup\$ Scalars are perfectly acceptable as conversion factors. \$\endgroup\$ – Ignacio Vazquez-Abrams Apr 29 '16 at 8:40
  • \$\begingroup\$ Depending on your contract, you might also get billed for reactive power, so conversion might get more complex \$\endgroup\$ – Christian Apr 29 '16 at 8:57
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kW = kVA X Power Factor. Power factor is a number between zero and one because is is the cosine of the phase difference between voltage and current. Therefore kW is always equal to or less than kVA for a given situation.

Price/kW = Price/(kVAxpf)

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How do we convert price per kVA to price per kW?

You pay for energy by kWh (not kW) and reactive power by the kVArh (not kVA).

For an industrial supply or large business supply you may also pay for

  • MIC (maximum import capacity) which is your contracted supply capability.
  • Max demand (maximum kWh used in a 15 or 30 minute interval during the billing period). The idea here is to discourage high peak loads.
  • Reactive power or wattless units. Generally the utility company should be happy enough if you keep your power factor above 0.95. If it drops below this then expect to pay a surcharge for wattless units.

I have been told that since kVA is a smaller "unit",

No. Since kWh = kVArh x power factor, and power factor is always <= 1, then kVArh is larger than kWh.

price per kW is higher than price per kVA.

True.

I'm not entirely sure kVA and kW are not simply units as Power Factor is not really a conversion factor.

  • The kWh measures real energy used.
  • The kVArh is effectively energy lost by the utility company in their transmission network feeding into a reactive (inductive or capacitive) load at the customer. If they don't charge for it the problem tends not to get fixed.
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