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Discuss how power factor tariff results into energy conservation.

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Power factor tariff results into energy conservation: i) Applying incentives and penalties according to power factor is an effective way, which enables consumer to improve power factor so that he can reduce his higher electricity bill. ii) Incentive is given to those consumers who are charged on the basis of maximum demand and are provided with meters to measure their load power factor. iii) When the average power factor of the consumer is more than 0.95, an incentive at the rate of 1% of the amount of the monthly bill is given. iv) When the average power factor of the consumer is 0.99 an incentive at the rate of 5 % of the amount of the monthly bill is given. v) When the average power factor of the consumer is unity an incentive at the rate of 7% of the amount of the monthly bill is given. vi) If power factor declines from 0.9, consumer is penalizes at the rate of 1 %. It is further increases with low power factor. Thus motivating consumers for maintaining higher power factor will finally leads to reduction in the current drawn by the load and helps for energy conservation.

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