In an electric power system, a load with a low power factor draws more current than a load with a high power factor for the same amount of useful power transferred. This leads to more inefficient use of the power system. Power Factor is a unit which measures the ratio between the Active Power (Watt) and the Apparent Power (Volt Ampere) and is a measure on how efficiently the power system is being used. We should consider the difference between the Power Factor (or True Power Factor) which includes RMS Current (and thus also the effect of harmonics on the system efficiency) and Cos Phi (or Displacement Power Factor) which is the same ratio considering only the fundamental current.
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