In an AC powered system, the ratio between the AC power that actually performs work (Watt = Voltage times Current) and the power that is applied (applied voltage times applied current) is measured by the Power Factor. A power factor of 1.0 means that all of the applied AC voltage and AC current performs work. The electric energy in an AC system that performs work is measured in kWatt. The applied power or apparent power is measured in kVA (applied voltage multiplied by applied current).
Conceptually, Apparent power (kVA) is equal to Power that Performs Work (kW) plus Power that is wasted or reactive power (VAR). The illustration that is offered in many texts is of a glass of beer. You pay for the whole glass of beer, but the glass is composed of the beer which is the useful part and the foam on top which is not very satisfying.
The simple reason for the difference is that in an AC system any inductance results in the AC current wave form to lag the AC voltage wave form by 90 degrees. The current and voltage are no longer in sync, thus the work performed (watts = current times voltage) is reduced. Inductance in an AC power distribution network is common. An inductor is essentially a coil of wire and in most typical electric power distribution systems represented by motors.
If paying for the **foam** is not important, then read no further. If electric power efficiency and sustainability are important, a sub-metering system that can perform the Power Factor calculation by distribution line in real time is critical to identifying the source of the **foam**. Once identified steps can be taken to ameliorate the Reactive Power, returning Power Factor closer to 1.0.