Which statement best describes the effect of lagging power factor on system capacity?

• A. It increases efficiency
• B. It reduces efficiency
• C. It reduces usable capacity due to reactive power
• D. It has no effect on capacity

Answer: (C)

When the current lags the voltage, the power factor is lagging, which means more reactive power is drawn for the same real power. Since P = VI cos φ and Q = VI sin φ, a smaller cos φ (lagging) increases the current required to deliver the same real power. That extra current raises I^2R losses and voltage drop, and pushes equipment toward its kVA rating. Because ratings are based on apparent power (kVA), the usable real power capacity is reduced when reactive power is high. Improved power factor (less lag) frees up real power capacity, which is why lagging power factor lowers usable capacity.