What can be the effect of poor power factor in a circuit?

The option indicating that poor power factor causes energy losses and increased costs is correct because a poor power factor signifies that a significant amount of energy is being wasted in the form of reactive power rather than being utilized effectively for useful work. Since power factor is a measure of how effectively electrical power is being converted into useful work output, a lower power factor indicates that a larger proportion of the total power is reactive, which does not perform any useful work.

Utilities often charge higher rates for customers with low power factors because these customers require more total current in the system to achieve the same useful power output. Consequently, this situation can lead to increased energy costs. Furthermore, poor power factor can cause additional heating in conductors and equipment, leading to energy losses and potentially reducing the lifespan of electrical components due to increased thermal stress.

Improving the power factor, often through the use of power factor correction devices, can lead to lower energy costs and improved efficiency in the electrical system, highlighting the importance of maintaining an optimal power factor.