Novoenergy Enginering Ltd. Supply manufacturing,maintenance & installation Power constitutes a major component cost in industry. In an electrical installation, power factor may become poor because of induction motors, welding machines, powertransformers, voltage regulators, arc and induction furnaces, choke coils, neon signs etc. A poor power factor for the plant causes huge amount of losses, leading to thermal problem in switchgears. However power factor is controllable with a properly designed power factor improvement capacitors system. The power factor correction obtained by using capacitor banks to generate locally the reactive energy necessary for the transfer of electrical useful power, allows a better and more rational technical-economical management of the plants. This paper describes different aspects of power factor improvement in a typical industrial plant with the help of a casestudy.