Following are the Causes of low power factor: - 1. Magnitude of Magnetizing Current :- As magnetizing current increases, power factor reduces. 2. Due to use of Induction Motor:- Most of industrial drives, agriculture pumps, lift, irrigation pump set uses I.M. which works at lagging power factor, and so power factor reduces. 3. Due to use of Transformer: - All transformers works at lagging power factor, so power factor of system reduces. 4. Due to welding transformer: - Welding transformers are operated at low p.f. which reduces p.f. of the system. 5. Due to inductance of transmission & distribution Line: - In case of AC transmission & distribution lines, inductance is present which the main cause of low power factor . 6. Series Reactor:- Series reactor is used in substation to minimize fault current Which causes low power factor. 7. Industrial electrical heating furnaces:- Induction and arc furnace used in steel manufacturing industry works at low p.f. which reduces p.f. of the system. 8. Arc Lamp:- Arc lamp & electric discharge lamps operates at low p.f.so p.f. of the system reduces. 9. Equipments operated at light load:- P.f. falls if equipments like alternator, transformer, I.M.etc are not operated at full load. 10. Improper repairs and maintenance:- P.f. falls if proper maintenance or repairs of equipments are not done.