Power quality and solar at industrial sites
How on-site solar interacts with a factory's electrical system — power factor, harmonics, voltage, protection and the design checks that avoid surprises.
By ANR Horizon Editorial Team · · 4 min read

Most discussions about industrial solar focus on energy and savings. But a factory's electrical system is a complex network of transformers, motors, drives, capacitors and protection devices. Adding a solar system changes how power flows through that network. Done carefully, solar integrates smoothly. Done carelessly, it can cause power factor penalties, nuisance tripping or equipment stress.
Power factor
The basics
Power factor describes how effectively a facility uses electrical power. Many industrial loads — motors in particular — draw reactive power as well as active power. Utilities often apply incentives or penalties based on power factor measured at the meter. See reading your industrial electricity bill.
How solar affects it
Solar inverters typically supply active power. When solar supplies part of the factory's active power, the grid supplies less active power — but the reactive power drawn from the grid may stay the same. The ratio changes, and the power factor measured at the grid meter can fall, potentially triggering penalties.
Solutions
- Capacitor banks adjusted or automatic power factor controllers re-tuned
- Inverter reactive power settings — many modern inverters can supply reactive power
- Active compensation equipment where needed
Address power factor during design, not after the first penalty.
Harmonics
Non-linear loads — variable frequency drives, rectifiers, LED lighting, inverters — distort current and voltage waveforms. Excessive harmonic distortion can:
- Overheat transformers and cables
- Cause capacitor bank failures
- Disturb sensitive equipment
- Breach utility limits
Solar inverters typically meet harmonic standards on their own, but combined with existing loads, total distortion should be checked. Capacitor banks can resonate with harmonics, so their interaction with solar needs attention.
Voltage
Solar injection can raise voltage at the point of connection, particularly at light load and high generation (for example, a Sunday afternoon). In weak networks or at the end of long feeders, this can push voltages outside limits. Inverter voltage control functions can help, and transformer tap settings may need review.
Protection
Coordination
Adding solar introduces a new source of fault current within the facility. Protection relays, breakers and fuses must be coordinated so faults are cleared correctly without unnecessary tripping.
Anti-islanding
Inverters must stop exporting when the grid supply is lost, to protect utility workers and equipment. This is standard inverter functionality, required by grid codes.
Reverse power
Where export isn't permitted, reverse power relays or export limiting controls prevent solar from feeding the grid.
Earthing
Solar systems need appropriate earthing and surge protection, integrated with the facility's earthing system.
Diesel generators
Many factories run diesel generators during grid outages. Solar operating alongside generators needs controls to prevent the generator being back-fed or operating below its minimum load. Generator–solar controllers manage this. Without them, solar typically shuts down during outages.
Before installation: electrical study
A good EPC partner should carry out or commission:
- Review of single-line diagram and existing equipment
- Load and power quality measurements — power factor, harmonics, voltage
- Assessment of connection point — transformer capacity, protection
- Design of compensation if needed
- Protection coordination study
- Generator integration design, if applicable
After installation: monitoring
- Monitor power factor and reactive power at the meter
- Check harmonic levels periodically
- Review protection operations
- Track inverter alarms related to grid conditions
A quick checklist
| Issue | Check |
|---|---|
| Power factor | Will capacitor banks or inverters be adjusted? |
| Harmonics | Has total distortion with solar been assessed? |
| Voltage | Could light-load periods cause high voltage? |
| Protection | Have relay settings been coordinated? |
| Generators | Is a controller needed? |
| Export | Is export allowed, or must it be limited? |
Common mistakes
- Treating solar as a simple add-on to the electrical system
- Discovering power factor penalties after installation
- Ignoring capacitor–harmonic interactions
- Running solar with diesel generators without controls
- Not updating protection settings
Sensitive equipment
Some factories run equipment that is sensitive to voltage dips, flicker or harmonics — CNC machines, process controls, laboratory instruments, data centres. Solar output can change quickly when clouds pass, causing small, rapid shifts in power flow. In most facilities this is unnoticeable, but where sensitive equipment shares a supply with a large solar system, it is worth checking voltage stability during passing cloud and confirming that inverter ramp-rate settings are appropriate.
Utility connection requirements
The distribution company will have technical requirements for connecting a solar system — protection, metering, inverter certification and sometimes power quality limits at the point of connection. These are set out in applicable regulations and the utility's procedures. Confirm them before design is finalised, because changes after installation are costly.
When batteries are added
Adding battery storage later introduces another inverter-based source and changes power flows again. Protection, power factor control and generator integration should be reviewed for the combined system, not just the battery. See battery storage for industrial sites.
How we help
Through our C&I solar work with industrial consumers, we help ensure EPC partners include electrical studies in their scope and that power quality issues are addressed in design. Electrical engineering is carried out by qualified partners.
Frequently asked questions
Have a project or land in mind?
Talk to ANR Horizon Group about land, solar, wind or industrial projects — wherever you sit in the process.
More on industrial energy

Industrial Energy
Battery storage for industrial sites: an introduction
What battery storage can do for factories — peak shaving, solar shifting, backup and power quality — the main technologies, costs and the questions to ask.
14 October 2026 · 4 min read

Industrial Energy
CAPEX vs OPEX solar: which model suits your factory?
How owning a solar system (CAPEX) compares with buying its power from a developer (OPEX/RESCO) — cost, risk, control, maintenance and contract terms.
14 October 2026 · 4 min read

Industrial Energy
Energy banking explained: storing renewable credits in the grid
How energy banking lets surplus renewable generation be credited and used later, the rules and charges involved, and how banking terms change value.
14 October 2026 · 4 min read