Power is made up of watts and vars (var = volt-amp reactive, in case you were wondering).
Watts are simple. If you have a 40 watt light bulb, it takes those 40 watts of electrical energy and converts them into light and heat. Simple. The more watts you use, the more electricity you use. I’m sure everyone gets the concept.
Vars are a bit harder to explain but let me give it a shot here.
Take a coil of wire. If you run electricity through it, a magnetic field is formed, storing some of the electricity. Remove the current and the magnetic field collapses, releasing all of that stored energy as electrical current again. The coil of wire doesn’t really do anything with this energy, it just stores it and releases it.
Your home electricity is a sine wave with a frequency of 60 Hz (50 in some parts of the world). For coils of wire (aka inductors) this means that for part of the AC cycle they are storing up energy and for part of the AC cycle they are releasing energy. But the inductors never do anything with the energy other than store and release it, so it’s kinda “wasted” energy. We engineers also call it “imaginary” power (“real” power is the watts part). The thing is, the generator supplying your power has to send out extra current to charge up the inductor, even though that energy just gets released later. It makes your generator work harder without actually accomplishing any extra work. Basically. the generator has to supply the vars that charge up the inductors.
There’s also a thing called a capacitor. In its simplest form, its just two plates of metal next to each other. Capacitors also store energy, but instead of storing it in a magnetic field like inductors do, capacitors store it in an electric field. If you hate physics and are completely staring into space after that last sentence, the important thing is that if you have a sine wave (like your home electricity), capacitors and inductors work kinda opposite of each other. During the time when the inductors are charging, capacitors are discharging, and vice-versa.
Residential loads tend to be slightly inductive, due mostly to motors in things like hair dryers, vacuum cleaners, washing machines, etc. Because of this, the power company has to supply extra current to handle the extra vars. But, since capacitors and inductors kinda work opposite each other, instead of using bigger generators, the power company can just add capacitors onto the lines. So, that’s what they do. Back at the substation they have big honking capacitors that they switch on and off of the line. If you get it perfectly balanced, then what happens is that the capacitors discharge and supply the energy while the inductors are charging, then later in the cycle when the inductors discharge the energy gets stored in the capacitors. You end up with the “imaginary” power just bouncing back and forth between the inductors and the capacitors, so the generator only has to supply the “real” power you use, the watts. The power company therefore tries very hard to balance out the inductive loads of houses with capacitors, because this makes things most efficient for them.
This “kvar” unit does essentially the same thing (you’ll notice they even use “var” in the name of their little gizmo). So what’s in a kvar? Just some capacitors. This will help to eliminate the vars and make power transmission into your house more efficient.
But, here’s the important thing. The power company doesn’t charge you for the vars.
The power company only charges you for the watts. So, this thing is going to save you money by eliminating something you don’t pay for anyway.
You may have noticed a slight flaw in their plan. They plan on saving you money by making you not pay for something that you aren’t paying for anyway. In other words, they are going to take something that costs you ZERO and make you pay less for it.
So, just to be clear: It is not possible for these devices to save you money.
The way we measure how efficient your power is being delivered to you is called “power factor”. A power factor of 1 means all you have is watts. A power factor of 0 means all you have is vars. Like I said above, it’s most efficient if you get all of the vars to balance out, so you want your power factor to be as close to 1 as possible.
You’ll also see devices marketed as “power factor correction devices” or some such. They are the exactly the same thing is this kvar piece of crap. Instead of using the word “var” they are using the word “power factor” but we’re still talking about exactly the same thing.
The old fashioned spinning wheel type electrical meter doesn’t measure or record vars. The newer fancy shmancy meters with the LCD displays and such do measure the vars, but the power company still doesn’t charge you for them. The reason the new meters record them is so the power company can tell if you are doing something weird that has your vars way out of whack. If your power factor is really low (which you’d have to be doing something very abnormal) then the power company may come along and tell you to do something about it, but they won’t charge you for the vars.
Quite frankly, the power company doesn’t care about your vars because they planned on the cost of the capacitor banks at the substation when they figured out how much to charge you for electricity. Residential loads are fairly predictable, so as long as you don’t do something strange it’s all just business as usual for the power company.
If you are a business or a manufacturing plant, though, things are different. In your contract with the power company, they will flat out tell you up front that you need to keep your power factor above a certain level (typically something like 0.7) or they’ll charge you extra for the vars. If you are a manufacturing plant running big honking motors, you’ll pay through the nose for the extra vars. So, businesses and manufacturing plants will often install power factor correction devices. They are not these little kvar pieces of crap, but they are essentially the same thing, only much bigger.
So, if you are running a couple of 40,000 hp motors in your back yard you may need to look into power factor correction devices, but if you are a typical home owner you are wasting your money.
The guys that sell these things are a bunch of sneaky bastards too. They usually have a current meter on the device, which only shows the magnitude of the current running through it. The meter doesn’t tell you how much of that current is “real” and how much of it is “imaginary”. When you switch on the device, the magnitude of the current drops because you are balancing out the vars. The drop isn’t usually dramatic (a few percent or so, maybe 10 percent tops) so the fact that you aren’t saving anything really isn’t dramatically obvious on your electric bill.