What is Power Factor or True Power Factor?

The ratio of real power to apparent power and is:  PF = (Power actually delivered to load) ÷ (RMS Voltage x RMS Current).  Waveform distortion caused by harmonics is included in this calculation.  The worse the phase shift between voltage and current and/or the worse the harmonic distortion, the worse the power factor.  Low power factor cause by either harmonic currents (and a distorted sine wave) or reactive power can increase transformer heating.  If PF is low but DPF is not, adding power factor correction capacitors may not help

Displacement power factor (DPF) is different.  DPF is the cosine of phase angle between the current and voltage fundamental sine waves.  Low power factor is typically caused by inductive loads such as motors.  Fundamental power factor only looks at the 60 Hz sine wave and does not take into effect harmonic currents.  DPF is most useful for sizing and measuring the effectiveness of power factor correct capacitors.

If PF is low but DPF is not, harmonics may be causing the problem and adding power factor correction capacitors may not improve either PF or DPF.  Solutions such as harmonic mitigating transformers or line reactors should be considered.