Apr 06 2009

Home Energy Scams

I was recently asked about a device for saving energy costs at home – a device for power factor optimization. I checked it out, and it indeed does have all the red flags for a juicy scam.

Techno Scams

One flavor of scam is to overwhelm a potential customer with technical information that sounds superficially impressive but which the customer is sure not to understand. There may be a kernel of truth to the science, but it just takes one technical fatal flaw to doom an otherwise plausible scheme. Examples include special audio cables that cost thousands of dollars, but do not produce any audible difference in sound quality.

A subset of these scams is to take a technology that actually has some advantage in specific industrial applications and then adapt them for residential or personal use, where they have not benefit. An examples of this is filling tires with pure nitrogen – this has a small but real benefit for trucks and large vehicles, but not for your family car.

Sometimes part of the scam is to come into the home with some gizmo and then give an impressive-looking demonstration. Home water filter salesmen are known for this.

Protect Yourself

There are some very useful rules of thumb to follow when someone is trying to sell you such a  device. Do not purchase of device if you do not understand the science behind it. Do not let a slick salesmen dazzle you with technobabble. If you don’t understand the claims well enough to judge them for yourself, then consult an expert before making a purchase.

Listen to your common sense. If a claim sounds too good to be true, that’s because it probably is. Adding a magnet to your fuel line is not going to increase the fuel efficiency of your car by 30%. You have to ask yourself – if such a claim were true, why isn’t everyone using such a device. Why isn’t the government mandating that such devices are added to all cars. Imagine if we could reduce the fuel use of our automobile fleet by 30%.

Don’t believe testimonials. Testimonials are worthless, they can be invented, they can be given by people who have a stake in the company or the sale, or they could just be cherry picked and misleading. Testimonials are used because people emotionally find them compelling, but they are worthless as evidence. If a company has a link to testimonials, but not a link to published peer-reviewed scientific evidence, or to official government or industry information – then be wary.

But also – be wary of links to official government or industry information. This may be legitimate, but ask yourself if the links actually support the claim or are just provided to give the impression of legitimacy. One trick, for example, is for medical device marketers to claim that their device is listed with the FDA. This makes consumers think that the claims made for the device are FDA approved, but this is not true. Again – if you have dificulty sorting this out, consult an expert or a more knowledgable friend.

And of course – generic advice – don’t let yourself get pressured into a quick sale. Take the time to investigate. Anyone who wants you to make a decision right then is scamming you.

Power Factor Optimization

Now back to power factor optimization – what is it? This falls under the category of something that is useful for industry, but not for residential use. Companies selling this for the home, will typically impress their customers with a long, and generally accurate, description of the physics. But they leave out the little detail that dooms their claims.

In short, these devices reduce reactive force – technically volt-ampere reactive power, or var. There are two kinds of loads in an electric circuit: resistance and reactive. Resistance is what does useful work – turning a motor or lighting a lightbulg. Reactive load results from differences in the current and the voltage and essentially is wasted as heat.

Var devices claim that they balance the current and voltage (using capacitors and other methods) and therefore reduces reactive load, decreasing the amount of electricity that is wasted as heat, and thereby increasing efficiency. This, therefore, will reduce your electric bills by reducing waste electricity.

But here’s the kicker – electric companies measure and charge for only the resistance load, electricity that does work. They do not care about the reactive load for residential homes because it is generally minimal.

They do measure the reactive load for industrial use, where certain pieces of equipment may have significant reactive load. They charge a “penalty” for high reactive loads for industrial use – but not to residential customers.

Therefore the savings for a residential user should be minimal to nothing.

Some companies, like KVAR energy controller, appear to make devices that actually work, in that they may reduce reactive load. They have to be installed by an electrician at the circuit breaker box – the point at which electricity enters the house. The problem appears only to be the application to the home and the claims for electric bill savings, with only testimonials to support these claims.

Even the modest 10% savings they are claiming would be huge if employed nationwide. If it really worked I would think it would either be mandated, or supported by a tax refund or other incentive.

There may also be outright fraudulent products out there also. I recently received this e-mail from an SGU listener:

Last year I was visiting my mom and she had an appointment with some people to come over and check her house because they could “save her money” on her electrical bill.  Of couse when they showed up I was immediatly asking for specifics about what they did.  They had all kinds of fancy words and equipment, but here is the jist.  The lady pluged a device with a small LCD screen into the wall sockett and said, “Ooohhh…” then told me that the current in the line was jumping up and down really bad.  She also threw in some “wave” and Diffrental” words   She then pluged a capacitor into another plug on the same circuit and showed me her little LCD readout witch had droped to neer zero.  She told me that the capacitor would store all that wasted energy “noise” and smooth out the flow in the lines, then release it later.  Thus saving up to 30% on your energy bill.  I was astounded, mostly that my mother and stepdad would let these people within 100 yards of their front door.

A device plugged into an outlet would not plausibly achieve power factor optimization,  so this is a scam of a scam. But we see here the typical ploy of doing the in-home demonstration combined with some technobabble and some impressive claims – 30%, wow.


I had to spend some time investigating this one. The basic concept of installing a device at the junction box to reduce wasted electricity sounds superficially reasonable. There are advancements in effiiciency all the time as the technology evolves. Home appliances and electrical circuits today are generally more effiicient than they were 50 years ago. Just like cars today are much more fuel efficient than those of the past (although in the US they are also bigger on average, offsetting some of the advantage in fuel efficiency).

Also – the back story of reactive vs resistive loads is all correct. But still, the extraordinary claims and the marketing style set off my skeptical alarm bells. The devil is in the details, and in this case power factor optimization seems to be useless for residential use, although legitimate for certain industrial applications.

I also acknowledge that I am not an electrical engineer, and some of the technical websites I consulted exceeded  my basic knowledge in this area. So if there are any electrical engineers out there – please add any needed detail or corrections to my summary.

But I followed my own advice – I consulted the experts, and my summary above is what they had to say.

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