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Wattless charges for business - explained

If you work from large commercial or industrial premises, you are likely to have items of electrical equipment that require wattless energy to operate.

Wattless energy is measured separately from your general units, and if you exceed a certain limit, there will be a separate charge.

How wattless charges work …

Electric power consists of two components: active power and reactive power.

Active power is recorded on your normal electricity meter, and appears on your bill as general day and night units.

Reactive power is also recorded by your normal meter, but will only affect you if you are a large industrial or commercial business user. This is because certain equipment common to industrial or other large businesses - such as motors or fluorescent lights (e.g. in an industrial premises) - need reactive power in order to operate.

Your wattless unit allowance

If the number of wattless units you use in a single billing period exceeds a limit of one-third of all your general units (both day and night), then a charge will apply.
We use the term power factor to explain this one-third ratio between active and reactive power, or general and wattless units. An overall power factor of 0.95 must be maintained in order to avoid wattless charges.

If your consumption of wattless units increases above one-third of your general units per bill, the power factor will drop below 0.95, and the excess wattless units will incur a charge.

How to reduce wattless charges

You should contact your electrical contractor to fit power factor correction equipment. This will reduce the amount of reactive power you consume and help to avoid wattless charges on your bills.


Cost considerations

You need to consider the cost of fitting special power factor correction equipment and assess how it will reduce wattless charges on your bill.

The rate at which the new device will pay for itself naturally varies according to the level of wattless charges you have incurred. But generally speaking, if you have had a consistent wattless charge on every bill, the payback period is less than four years.
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