Reactive energy on the invoice: when you pay for it and how to avoid it

What reactive energy is, and what cos φ means

For ARERA, Italy’s energy authority, reactive energy is “energy ancillary to the operation of electrical equipment, which produces no useful effect and increases network losses”. The meter measures it separately, in kvarh; active energy is measured in kWh.

The ratio between the two is expressed by the power factor, also called cos φ (read “cosine phi”, and often written “cos phi” in searches). The more reactive energy there is relative to active energy, the lower the number: with reactive energy at 33% of active energy, cos φ is 0.95; at 75%, it is 0.8.

The charges cover two costs that reactive energy causes for whoever runs the network: losses, and building the network itself.

Who pays the charges (the “penalties”)

They are often called “penalties”, but in the regulations they are reactive energy charges. ARERA sets them in the TIT, the consolidated text on distribution tariffs for the period 2024–2027 (Articles 31–34), and they are applied by the distributor, the local network company your supply point is connected to.

• You pay them if you are a non-domestic customer in medium voltage, or in low voltage with available power above 16.5 kW. Available power is the maximum you can draw without the supply being cut off.
• You do not pay them if the supply is domestic, or if it is in low voltage up to 16.5 kW.

Besides the cost there are technical limits: the power factor must not fall below 0.9 at the moment of peak load in F1 and F2, nor below 0.7 as a monthly average, and a customer must not feed reactive energy into the grid. If you do not comply with them, the distributor can ask you to bring the installation into line, “on pain of suspension of the service”.

When they apply: the thresholds, band by band

The calculation is made every month, for each time band.

National holidays are excluded from F1 and F2. Reactive energy fed in during F3 has been charged since 1 April 2023 (resolution 232/2022/R/eel). Since 2024 there has been a single charge per voltage level, with no brackets and no allowances (resolution 616/2023/R/eel). For 2026 it is 0.377 euro cents per kvarh in medium voltage and 1.088 cents in low voltage, both on reactive energy drawn above the threshold and on reactive energy fed in (Table 5 of the TIT, resolution 575/2025/R/eel). ARERA updates it every year.

Two exceptions. The distributor, following guidance from the national transmission grid operator, can agree different thresholds with you, for local grid needs. And in low voltage, reactive energy fed in is not charged if the meter cannot record it by time band.

Where you find it on the invoice

For low-voltage supplies, since 1 July 2025 the invoice format has been set by ARERA resolution 315/2024/R/com. If the available power exceeds 16.5 kW:

• in the energy receipt, the cost summary, a dedicated line appears within the consumption charge when the thresholds are exceeded: the kvarh, the average price in euros per kvarh and the amount;
• in the itemised details, the document with every item and its unit price, there is the reactive energy charge;
• under readings and consumption you find the reactive energy invoiced and the ratio between reactive and active energy; and, month by month, the actual power factor, even in the months when reactive energy is not charged.

ARERA wanted the power factor shown month by month on the invoice “as an information tool useful for improving energy efficiency”. In medium voltage, resolution 315/2024/R/com does not apply. We explain the rest of the invoice in the guide How to read a business’s energy invoice.

How to avoid them: correct the power factor, but not too much

Reactive energy is reduced, or eliminated, on site with power factor correction: for ARERA, “specific installation measures (power factor correction capacitors)”. It is technical work on the electrical system, to be entrusted to a technician.

The opposite risk is power factor correction connected when it is not needed: reactive energy can end up in the grid, and in F3 you pay for all of it. To reduce it, ARERA indicates as a typical action “disconnecting power factor correction systems when not needed”.

Every month, on the invoice:

• look at the ratio between reactive and active energy: in F1 and F2 the threshold is 33%;
• see whether there is reactive energy fed in during F3: there is no threshold there;
• check that the charge is the one for the year and for your voltage level, and that the threshold is the TIT one, unless you have agreed a different one with the distributor.

How we help you

We recalculate every invoice item by item with Calibra, our software, with the regulation alongside. If a charge does not add up, we gather the documentation and dispute it with the supplier. In the service for consumers we also look after the contracts and the power levels of your supply points. Power factor correction, however, we neither design nor install: that is the job of the technician who looks after your electrical system.