In electrical terms, capacitance is also considered as a "reactive power" component but in fact is characteristic in an electric circuit is to neutralise or compensate for the inductive reactive power. Thus we have an item of electrical equipment which can be used to effectively offset a proportion of the reactive power drawn from the supply.

Without capacitors connected the motors draw active and reactive power and the transformer feeding the installation is fully loaded. With appropriately rated capacitors connected in parallel with the motors the reactive power drawn from the supply is neutralised and the transformer only feeds active power. This means that the reactive power supplied by the Electricity company is reduced and reactive power charges eliminated.

The power capacitor is however a static device (no moving parts) so maintenance is minimal. They are also electrically very efficient so their use on a network makes no significant increase in the active power requirement from the supply authority.