What do reactive power charges cost a business?

Reactive power charges cost a medium-voltage business a surcharge per kVArh above a free allowance. Every business also pays in capacity: more amps and kVA for the same kilowatts. A capacitor bank is the usual first fix; the inverter of a business battery can help if the product and its control support it.

A kVArh line on your grid bill nobody can explain, grown since the solar panels went in? Or a "full" 250 kVA transformer while your peak in kilowatts looks well below it?

A farmer with cooling machines logged about 114 kVA while the farm used about 79 kW. "Where does the reactive power in the system go? Back to the batteries?" he asked on a solar forum.

What is reactive power, and why does your grid operator care?

Reactive power is the part of the current that builds magnetic fields in motors, transformers and welding sets, without doing work. It flows back and forth. The cos phi (power factor) says how much of the total is useful: 1 means all of it, 0.8 means 80%.

Active power in kW does the work; reactive power in kVAr builds the magnetic fields. Apparent power in kVA is what cables and transformers carry.

The IET puts the magnetising current of a motor at 20% to 60% of its full-load current, however hard it works. So a half-loaded motor has a worse cos phi than a fully loaded one.

The usual causes, says the IET: induction motors, power transformers, lighting ballasts, welding sets and induction furnaces. A second cause is a distorted current from rectifiers, inverters, frequency drives and switched-mode power supplies. That second kind cannot be fixed with capacitors alone: it needs a change in the equipment or harmonic filters.

Those extra amps heat cables and transformers and lower the voltage along the line, so the grid rules bill what comes above a free amount. Even a data-centre engineer asked why generators are sold in kVA at power factor 0.8, when his site never drops below 0.95.

How are reactive power charges for a business billed in Flanders, Wallonia and Brussels?

Each region sets its own rule: a free allowance as a share of your active energy, and a price per kVArh above it. In Flanders and Brussels that allowance is 48.4%, about cos phi 0.9; low-voltage businesses there do not pay it.

In Flanders the rule sits in the Technical Regulation for Distribution (TRDE) of the regulator VREG. Inductive and capacitive reactive energy are measured separately and never offset against each other. The allowance applies per quarter-hour.

So a few bad quarter-hours cost money even when your monthly average looks fine, for example at night when only transformers and pumps run. Fluvius has calculated reactive energy per quarter-hour for its large customers since the capacity tariff reform. The VREG tariff method adds: no reactive tariff when the meter cannot measure reactive energy.

ORES bills reactive energy on the quarter-hour measurements of remotely read (AMR) meters: capacitive and inductive separately, for offtake and injection.

How ORES and Sibelga bill the rest of your grid costs is in our article on grid tariffs for businesses in Wallonia and Brussels. Not sure whether your site is on low or medium voltage? Read what that changes in our article on low voltage or medium voltage for a business.

What does a bad cos phi cost you in euros?

On the bill, usually hundreds to a few thousand euros a year for a medium-sized site; in capacity, much more. The example is illustrative, not a customer case: a Flemish medium-voltage site taking 40,000 kWh a month from the grid, at the Fluvius 2026 price.

At cos phi 0.75 the site takes about 35,300 kVArh a month. The allowance is 48.4% of 40,000 kWh, or 19,360 kVArh; the rest, about 15,900 kVArh at €0.0134, costs about €214 a month. We used the monthly average as if every quarter-hour looked the same, so a real site with uneven loads usually pays more.

Reactive power does no work, but you pay for it twice: on the bill, and in every cable, transformer and connection that carries it. At cos phi 0.75 a site needs a third more kVA and amps than at cos phi 1.

A 250 kVA transformer then delivers about 188 kW of work, against about 238 kW at cos phi 0.95. Those 50 kW separate "the transformer is full" from room for a new machine. A bigger connection or transformer, the obvious fix, pays for amps that do no work.

Is the transformer really too small? Our article on a cabin transformer that is too small lists the options. Whether a new cabin is worth it is the question of our article on a medium-voltage cabin or a battery.

On low voltage there is no kVArh line, but the physics is the same: your main breaker trips on amps, not kilowatts. When apparent power is not measured, the TRDE even assumes cos phi 0.9 to compare your power with your connection capacity.

Why can solar panels make your cos phi worse?

The solar inverter supplies active power, while your motors still take their reactive power from the grid. The meter sees fewer kWh but the same kVArh, so the ratio gets worse and the free allowance, which follows your kWh, shrinks.

SMA, the inverter maker, describes it: a solar system at a power factor of 1 makes a poor power factor at the grid connection worse. If solar covers 40% of the example site's kWh, the grid delivers 24,000 kWh a month but still about 35,300 kVArh.

The cos phi at the meter drops from 0.75 to about 0.56. In our simple sum the yearly surcharge rises from about €2,560 to about €3,810. At noon on a sunny day, when solar covers almost all the kW, single quarter-hours look even worse.

The opposite also happens. A fixed capacitor bank sized for a working day keeps supplying reactive power at night and at the weekend, when the motors stand still. The site then turns capacitive, and in Flanders capacitive kVArh above the allowance are billed too.

How do you improve cos phi with a capacitor bank?

You improve cos phi with capacitors that supply the reactive power locally, so it no longer comes over the grid. The technique is more than a hundred years old and cheap per kVAr.

The Walloon energy site Energie+ sizes it simply: the kVAr needed is the active power times the difference between tan phi before and after. For 200 kW from cos phi 0.75 to 0.95: 200 x (0.88 - 0.33), or about 110 kVAr. Its quick payback test: the capacitor cost divided by the monthly reactive charge gives the number of months.

The IET adds two warnings. Never connect capacitors to the output of a frequency drive, soft starter or inverter: they can seriously damage the electronics. With star-delta starters, the capacitors must not be switched rapidly on and off.

Why do motors ask so much at start-up, and how do drives change that? Read our article on the start-up current of a heavy machine.

Can a battery inverter compensate reactive power?

Technically yes: a modern battery or solar inverter can deliver or absorb reactive power on command, next to its active power. In practice four things decide: the model, the control, the grid settings and the inverter capacity you want to spend on it.

• The model. SMA solar inverters can provide reactive power by day and at night, SMA writes. Not every battery inverter has a reactive power setpoint for a site controller: ask to see it in the datasheet, in writing.
• The control. To correct your bill, the inverter must follow your grid meter, not its own terminals: a meter at the connection point and a controller that sends setpoints.
• The grid settings. In Belgium the Synergrid C10/11 rules set the reactive power behaviour of grid-connected inverters, protected against unauthorised change. Your installer designs them with the grid operator; they are no menu option.
• The capacity. Reactive power comes on top of active power and must fit the inverter rating: 100 kW at cos phi 0.95 needs at least 105 kVA (SMA).

Every kVAr the inverter delivers is capacity that cannot shave a peak or charge the battery at that same moment. Take an SMA example: an 80 kW site at cos phi 0.85 with a 60 kW solar inverter. To reach 0.90 at the connection, the inverter runs at cos phi 0.82.

The inverter then delivers only 49 kW of active power, so SMA advises about 20% more inverter capacity.

A business battery is chosen for peaks, solar and back-up first; reactive power is a useful extra, rarely the reason to buy one. How it lowers your quarter-hour peaks is explained in our article on peak shaving with a battery. Solar, battery and UPS inverters are compared in our article on the right inverter for a business.