Some solar energy integrators are offering kVAR units with their systems. These companies claim that this unit increases the value of the system - saving you up to 20% or more on your electricity bill than a solar energy system alone.

But do these units really save you money?

Who better than the EPA's Energy Star program to address this issue.

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Do Power Factor Correction Devices (sometimes called Amp Reduction Units or kVAR Units) really save money? Can they earn the ENERGY STAR label?

ENERGY STAR does not qualify any Power Factor Correction Devices. Please send us an email at logomisuse@energystar.gov if you see one that claims to be ENERGY STAR certified.

Power Factor Correction Devices claim to reduce residential energy bills and to prolong the productive life cycles of motors and appliances by reducing the reactive power (kVAR) that is needed from the electric utility.

We have not seen any data that proves these types of products for residential use accomplish what they claim. Power factor correction devices improve power quality but do not generally improve energy efficiency (meaning they won't reduce your energy bill). There are several reasons why their energy efficiency claims could be exaggerated. First, residential customers are not charged for KVA-hour usage, but by kilowatt-hour usage. This means that any savings in energy demand will not directly result in lowering a residential user's utility bill. Second, the only potential for real power savings would occur if the product were only put in the circuit while a reactive load (such as a motor) were running, and taken out of the circuit when the motor is not running. This is impractical, given that there are several motors in a typical home that can come on at any time (refrigerator, air conditioner, HVAC blower, vacuum cleaner, etc.), but the unit itself is intended for permanent, unattended connection near the house breaker panel.

For commercial facilities, power factor correction will rarely be cost-effective based on energy savings alone. The bulk of cost savings power factor correction can offer is in the form of avoided utility charges for low power factor. Energy savings are usually below 1% and always below 3% of load, the higher percentage occurring where motors are a large fraction of the overall load of a facility. Energy savings alone do not make an installation cost effective.

Power factor correction devices are NOT eligible for a federal tax credit.
[Source: Energy Star - http://bit.ly/cN2F3S ]
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And here are some other articles addressing the kVAR issue:

(1) From Eco Factory - "Skeptics who have tested the KVAR units for energy savings found that it had no effect on the speed of the meter"
http://www.ecofactory.com/news/are-kvar-units-scam-091809

(2) From NIST - "Specialists at the National Institute of Standards and Technology (NIST) have recently explained why the devices actually provide no savings by discussing the underlying physics"
http://www.nist.gov/eeel/quantum/power_121509.cfm

The Verdict: You can decide for yourself, but there seems to be overwheming evidence from very legitimate sources that kVAR units may not be all they are cracked up to be.