What is a reactive power charge on my electricity bill?
It is a charge for drawing more reactive power than your site's active power consumption justifies — in practice, a penalty for poor power factor. It shows up on half-hourly supplies with a lot of motors, compressors, older lighting or refrigeration, and it is usually fixable with power factor correction equipment.
Last reviewed 2 September 2026 by Utilities Made Simple · independent, whole-of-market, supplier-paid — how we are paid
What is actually being charged
Inductive equipment — motors, transformers, fluorescent ballasts, refrigeration — draws current that does no useful work but still has to be carried by the network. That is reactive power, measured in kVArh. Networks charge for it when it exceeds a threshold relative to your active consumption, because they have to size cables and transformers for the total current, not the useful part.
How to know if it applies to you
Look for a kVArh line, a "reactive power" line, or a power factor figure on a half-hourly bill. A power factor above roughly 0.95 attracts no charge. Below that, the charge grows quickly. Standard non-half-hourly SME meters do not measure reactive power at all, so if you cannot find the line you probably are not paying it.
Whether to fix it
Power factor correction is a capacitor bank installed at the incomer. It is a capital job, and the sums are simple: annual reactive charge against installed cost. Sites paying meaningful monthly reactive charges often see a payback inside two to three years; sites paying a few pounds a month should leave it alone. Get the annual figure off twelve months of bills before anyone quotes you for equipment.
Worth checking at the same time
Reactive charges usually turn up on the same sites that are paying for more available capacity than they need. Both are on the half-hourly bill and both are worth a look in the same sitting — see capacity charges and kVA explained.
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