Taking too long? Close loading screen.


We @Connectriq, help you understand your electricity bills and identify where you can act to reduce it. 

A customer with a commercial connection and load more than 20 kW, often end up paying a significant premium each month in-terms of power factor and/or contract demand penalty. Have you ever wondered what does power factor penalty mean or what is CD Penalty?
For a layman it is difficult to answer.
@Connectriq, We make you understand and eliminate penalties and optimized your electricity bill.

What is Power Factor and Power Factor penalty?

Suppose you order a mug of cappuccino. You pay for a “full” mug of cappuccino, but instead, what you get is a mug partially filled with froth i.e., less coffee.

If the coffee in your mug is real power (i.e. kWh), full glass is total power (i.e. kVAh), and froth in the mug is reactive power (i.e. kVArh). Power factor is the proportion or percentage of mug filled with coffee, i.e. kWh/kVAh.

If the coffee in one full mug is 75% and 25% froth, your power factor is 0.75.  Similarly, if you consume 1 kWh of power with 0.75 power factor, the energy that the utility has to supply is 1/0.75 = 1.33 kVAh. The 0.33 kVAh of energy is lost or froth in the coffee mug.

Thus, If the power factor is 1 or close to 1 then 1 kWh of electrical equipment would take 1 kWh of power from the utility. But, since it is drawing more energy from the utility there is penalty for it, which is called Power Factor Penalty.

Eliminate Power Factor Penalty

You can Save upto 50% on your Non-Domestic / Commercial Bills. (Small Font) Eliminate Power Factor Penalties by installing #Connectriq Automatic Power Factor Controller (APFC) and save on your electricity bills

What is Contract Demand and CD penalty?

Whenever you apply for a commercial electricity connection from an utility, you have to specify the maximum “demand“ (in kVA) that you need or Contract Demand (CD). During the month if you exceed your “Contract Demand” you have to pay penalty (or extra price) for the same. That is the CD penalty that appears on your electricity bills.

How can CD penalty be avoided?

  • If your power factor is less than 1 you can improve your output kW per KVA supplied by improving power factor or installing an Automatic Power Factor Controller (APFC Panel). This ensures that you are not wasting any kVA that is supplied to you by your utility.

  • Power factor is unity, but still the CD penalty is levied by the utility, in such scenario, you may have to request your utility to increase the contract demand. Still confused? Talk to our experts [Speak to our Expert]

  • Another option of avoiding CD penalty is by shifting your peak load to a time of day when your load is less.

Connect with us

Our Contact

  • Email Address


  • Call Us

    +91 9820 150 406

  • Address

    Connectriq Engineering Services LLP, Makwana Road, Marol, Andheri (east), Mumbai – 400059

Social Media

Get on Board

If you want to collaborate with #Connectriq to execute a project Together


If you want to collaborate with #Connectriq to execute a project Together