Power factor is a measure of the efficiency with which electrical power is consumed in an AC electrical system. It represents the ratio of real power (useful power) to apparent power (total power) in an electrical circuit.

In AC circuits, the current and voltage may not always be in phase due to the presence of inductive or capacitive loads. When the current lags or leads the voltage, it results in a displacement between the two waveforms. This phase difference between voltage and current causes a portion of the apparent power to be reactive power, which does no useful work but still contributes to the total power consumed by the system.

Improving power factor in electrical systems is essential for efficient energy utilization and reducing energy costs. Power factor correction techniques, such as adding power factor correction capacitors or using active power factor correction circuits, are employed to mitigate the effects of reactive power and improve overall system efficiency.