Why do we improve the power factor?

The reason for improving power factors are stated below;

• Large Line Losses (Copper Losses): Line losses (I²R) depend on current. The low power factor draws a large amount of current as compared to the high power factor.
• Large kVA rating and Size of Electrical Equipment; PF is inversely proportional to KVA. Low PF equipment with a high KVA rating is larger in size.
• Large Conductor Size and Cost; we need large conductors to transmit the heavy current required due to low power factor.
• Poor Voltage Regulation and Large Voltage Drop; The large current due to low PF causes a high voltage drop that needs to be regulated more often than usual.
• Low Efficiency; The losses due to the high current flow & voltage drop deteriorate the efficiency of the system. The efficiency is maximum at PF=1.