Many electronic device producers are now selling, mainly through the Internet, devices that are supposed to reduce your power consumption and lower your electric bill by "correcting the power factor".
They claim that
This definition is just wrong and misleading. The power factor is not connected to efficiency in this way.Power factor is the measure of the degree of efficiency at which your site uses its electrical power ("100%" is the best and "0%" is the worst).
Let's see what is the power factor and why it is not relevant for your bill (while it is relevant for the overall power distribution system efficiency).
Every house and business requires a certain amount of power from the power distribution network. This power is "used" by heaters, fridges, lights, machineries, etc. Instead of "used" it would be more correct to say that it is "converted" from electrical power into heat, mechanical power, etc.
Electric power suppliers charge the power that they provide to users, by using meters to measure individual usage.
According to the device that needs the electric power, smaller or larger currents have to flow on the electric lines and wires that get to your house. For example, a small current is needed for an incandescent light bulb, while a larger current is required by your fridge, even if they need the same power. It just depends on the particular device that needs the power.
The operator of the power distribution network doesn't want large currents on the wires to your home. Large currents mean power losses on the lines. And users don't pay for losses on the lines, as your meter is just close to your house.
From this it is already clear while this is a scam. It is true that if a device reduces the flowing current (in some sense by making a fridge look like a light bulb of the same power rating), then losses are lower. But this is not connected with your electric bill, because losses on the distribution network lines are paid by the network operator, not by you.
In some cases the distribution network operators fine users with very bad loads (that is, loads that require large currents for a small power). But this is only true for industrial customers, and indeed industrial customers do pay attention to this issue.
So these products are just a scam, they don't do what they say. You will not get a lower bill by plugging these products into your house.
One may say "Well, if these devices reduce losses on the network, then they are good. Ok, they don't lower MY bill, but everybody should have one, so the whole network is more efficient!"
This is true in some sense. Power distribution network operators do plug devices similar to these in the network. But there is no need that residential users do this, because to be effective, the "reactive power compensators" (this is the name of these devices) must be far more complicated. They are expensive, large, devices, that react to the network demand. They have nothing to do with the cheap devices that they try to sell you.