The ‘Energy Saver’ scam

The great ‘Energy Saver’ scam

©2019 L A Waygood

‘Are you tired of your utility provider hitting you in the pocket for no other reason than profiteering? Your days of battling with high electricity bills could be over, for a revolutionary new product has hit the market that could spell an immense discount on your monthly power bill, and the end to power company greed.’

Have you come across this advertisement? Or one of the many others just like it?

This particular advertisement goes on to say…

‘In 2017, a revolutionary new product called EcoWatt hit the market. Initially it was shielded from the general public, all because it offered the opportunity for average families to save on their monthly energy costs.’

It continues…

EcoWatt is the energy providers’ best-kept secret. They’ve been trying to hide it from the everyday power consumer and even have banned the sale of it in retail shops —just to maximize their profit. However, thanks to the internet, the secret is now out, and everyday customers are now reaping the rewards of less power consumption overall, as well as less power used by household appliances.

‘When EcoWatt was discovered overseas, power companies then spent millions (likely your money from years of overpaying) to stop the product from reaching retail store shelves. It would spell the end of their profiteering, and it was important that they kept it out of the public eye. However, the legality of such a move put a stop to this, and now close to 150,000 households worldwide are experiencing lower power bills, all because of an inconspicuous plug-in device.’

So, the blurb for this product is making some pretty serious accusations against the energy providers:

  • EcoWatt is the energy provider’s ‘best-kept secret’.
  • Initially, the energy providers ‘shielded the EcoWatt from the general public’.
  • Energy providers have been ‘trying to ban its sale in retail shops’.
  • Energy providers have ‘spent millions to stop the product from reaching retail store shelves’.

After reading this blurb, I decided to take a look at the EcoWatt distributer’s (Nexttech, a company based in Estonia) Terms and Conditions page. It made for interesting reading:

‘We are not responsible if information made available on this site is not accurate, complete or current. The material on this site is provided for general information only and should not be relied upon or used as the sole basis for making decisions without consulting primary, more accurate, more complete or more timely sources of information. Any reliance on the material on this site is at your own risk.’

So, Nexttech believe that they should not be held responsible for, in their own words: the accuracy of their advertising!! In other words, ‘…we can say what we like in our advertising, even if it’s not true’!

Let’s start by knocking these accusations about the energy providers on the head!

The principle used by the EcoWatt is called ‘power-factor correction’ or ‘power-factor improvement’, and it is widely-used in industry. I will explain this, later in this blog. However, the result of power-factor correction, properly applied, is to reduce the consumer’s load current. While this sounds exciting, as we will learn, this is neither ‘new’, nor ‘revolutionary’, nor does it reduce the consumers’ energy bill! In fact, power-factor correction doesn’t even apply to residential loads!

But, far from being the utility-providers’ ‘best-kept secret’, or being ‘first discovered overseas’, the EcoWatt device uses a technique that any electrical apprentice, even during the early stages of his or her training, would be more than familiar with! For that reason, any energy provider would have had a hard job trying to keep it ‘their best-kept secret’, or to have wasted ‘millions’ trying to keep devices such as the EcoWatt from reaching the shelves of retail outlets’!

In fact, the claims made by this particular company (and it is not alone, in this regard) are straightforward lies and their product is a scam.

Another company which sells so-called energy savers is ‘Electric Saver 1200‘ which is based in the United States. This company’s ‘explanation’ of how their device works was obviously written by someone with absolutely no understanding of electrical science:

‘By capturing and recycling (otherwise lost energy/watts) and releasing it back to your motor when needed, you can dramatically lower your energy bills. This recycling process reduces the amount of heat on the wires and the motors in your home. Reducing this heat (kilowatts) will lower your electricity bill and lengthen the life of the motors in your home.

This particular writer is obviously not even aware of the differences between ‘energy’ and ‘heat’, (both of which are measured in watt hours), and  ‘power’ (which is measured in watts)! As for ‘capturing and recycling… otherwise lost energy’… well, he is talking absolute nonsense!

How ‘Energy Savers’ actually ‘work’

Before we examine what these devices are, and how they actually work, let’s take a look at how another manufacturer (PowerSever 1200) attempts to explain how they work:

‘It improves the power factor by reducing the amount of electricity that is used from your utility company. This is accomplished by supplying electricity locally at the load by the use of a specially-designed capacitor. These advanced capacitors store the additional electricity needed for stabilizing electric current within an inductive load.(for example when we turn on our air condition unit).   Therefore, the amount of electricity purchased from your utility company by a power factor optimization has been greatly reduced and resulting in power savings for your home or office.‘

The entire explanation is complete and utter nonsense, which suggests that it must have been written by someone without any knowledge of alternating current in general, or of power-factor improvement in particular. It uses the term, ‘electricity(…amount of electricity…), as though it was a measurable quantity, which it isn’t; ludicrously suggests that quite-ordinary capacitors are ‘specially-designed’ and ‘advanced‘, which they’re not; and confuses ‘power’ for ‘energy’!

So, let’s find out what actually happens when we insert an EcoWattor any one of the many other similar devices, into a residential circuit.

Figure 1 shows an ‘equivalent circuit’ representing a typical domestic load. We have, if you like, ‘separated out’ the resistive (heating) and inductive (motor) loads, so that we can analyse how they behave. The resistor (R) represents all of the residence’s resistive loads —i.e. lamps, water heaters, ovens, etc. The inductor (L) represents all of the residence’s inductive loads —i.e. refrigerator motor, washing-machine motor, etc.

The supply current (I) is made up of two components: the current drawn by the resistive and any mechanical loads (IR) , and the current drawn by the inductive loads (IL) which provides the magnetic fields necessary for motor action to take place. These resistive and inductive currents aren’t really separate, independent, currents of course; we can’t measure them, separately, with an ammeter. They are simply a mathematical model for analysing the behaviour of their combined load current (i.e. the supply current).

Now, when we deal with alternating current, we cannot simply add the resistive and inductive currents algebraically, because they are out of phase with each other —the inductive current (IL) waveform lags the resistive current (IR) waveform by 90 electrical degrees. Instead, we have to represent these two currents vectorially, using what is called a ‘phasor diagram’. The supply current (I) is then the vectorial-sum the resistive current (IR) and the inductive current (IL). The angle between the supply current and the resistive current is called the ‘phase angle’ (Φ).

The rate at which the resistive current provides energy to the load is called the ‘true power’ of the load. The rate at which the inductive current provides energy to the load’s magnetic fields is called the ‘reactive power’.

True power’ represents the rate at which energy is being continually drawn from the supply and, of course, we have to pay for that energy.

Reactive power’, on the other hand, behaves in a truly interesting way. During one quarter-cycle of its waveform, it supplies energy to the (inductive) load, where it is stored in the magnetic field; but, during the next quarter-cycle, as the magnetic field collapses, it returns that energy back to the supply! In other words, ‘reactive power’ is a measure of the rate at which energy is continually ‘sloshing’ backwards and forwards between the supply and the inductive load.

Because the inductive load is not actually using-up any energy, but merely ‘borrowing’ it from, and then ‘returning’ it to, the supply, the net amount of energy consumed is zero, so we do not pay for that energy!

So, we pay for ‘true’ energy, but we don’t pay for ‘reactive’ energy. Remember these words!

Figure 2 shows a circuit diagram representing exactly the same resistive-inductive load but, this time, with an  ‘energy saver’ connected. These so-called ‘energy savers’ are simply capacitors. As you can see, the ‘energy-saver’ capacitor draws a small current, IC. The load current (I) now becomes the vectorial-sum of the resistive current (IR), the inductive current (IL), and the capacitive current (IC).

Now, as you can see, the new capacitive current (IC) acts in the opposite sense to the inductive current (IL). So when we vectorially add IR, IL, and IC together, the phase angle 2) gets smaller, and the load current (I) also ends up being smaller than it was before the capacitor was added.

Note that although we have reduced the overall load current (I), the values of the resistive current (IR) and inductive current (IL) remain completely unchanged. They remain exactly the same as they were before the capacitor was added. In other words, the resistive and inductive loads have absolutely no idea anything has changed, despite the reduction in load current.

If we had placed an ammeter in series with the loads, we would see a drop in load current from the moment the capacitor was added to the circuit.

But, the in-phase (resistive) current hasn’t changed at all. And this is the current which provides the ‘true’ energy that we are paying for! So, reducing the load current will have absolutely no effect whatsoever on reducing our energy bill.

Energy meters are designed to monitor the supply voltage and the in-phase (resistive)  current, NOT the supply current. So, reducing the supply current will have absolutely no effect whatsoever on the energy meter because it ignores that current anyway! It will measure exactly the same amount of energy after adding the ‘power-saver’ capacitor as it did before it was added.

When confronted with this information, one ‘energy-saver’ supplier argued that the reduction in load current would reduce the energy losses in a residence’s network of cables. While this is true to some extent, the amount of energy ‘saved’ is tiny (almost immeasurable) as the cables are sized in order to prevent just this sort of energy loss!

Just to tie up some loose ends. Using a capacitor (like the EcoWatt) to reduce the load current is termed ‘power-factor correction’ or ‘power-factor improvement’. Power factor is the cosine of the load’s phase angle —i.e. the angle between the load current and the resistive current. As the phase angle gets smaller, the power factor increases towards unity (1), and vice versa. Power-factor ‘improvement’ simply provides a means of making the phase angle smaller.

So, while ‘improving power factor’ acts to reduce the load current, it does NOT reduce the load’s energy consumption. The load’s energy consumption remains exactly the same, both before and after power-factor improvement is applied.

In fact, the energy supply companies could care less what residential power factors are. Which is why they have no reason whatsoever to ‘hide’ the EcoWatt or other similar devices.

However, power-factor improvement is very important for large industrial loads. A ‘poor’ power factor (i.e. typically below 0.95, which corresponds to a phase angle of about 19 degrees) means that a factory’s load is drawing far more load current than it actually needs when drawing energy from the supply. This requires the energy supply company to invest in thicker cables, larger transformers, etc., in order to supply the same amount of energy. Naturally, energy suppliers do not like this.

Because of this, industrial companies are fined whenever their load’s power factor falls below an agreed figure. This fine, or penalty, is over and above the company’s energy bill. So, power-factor correction (using industrial capacitors) is essential for these companies.


Power-factor improvement’ is a technique employed by large industrial companies to reduce their load current for a given load. These companies are fined if their power-factors fall below a specified value. Power-factor improvement does not affect the amount of energy the company uses, just the amount of load current. Why is it important to reduce the load current? Well, it reduces the need for the energy company to invest in thicker cables, larger transformers, etc.

But for residential consumers, power-factor improvement is completely unnecessary because energy companies ignore the power factor of residential loads, and only charge for the energy they supply.

Your residence’s power factor can be as low, or as high, as possible —it has absolutely no effect whatsoever on your energy bill!

So, devices such as the EcoWatt, which use a capacitor to ‘improve the power factor’ of a residential load, make absolutely no difference to the amount of energy consumed and, therefore, can not reduce a residential consumer’s energy bill.

They are nothing more than scams.

So, why do they publish endorsements for their products from ‘satisfied customers’? Well, in the case of EcoWatt, their ‘terms and conditions’ tell us that ‘We are not responsible if information made available on this site is not accurate, complete or current.’ In other words, it’s unlikely that most of these endorsements are genuine. Those that are, can probably put down to the ‘placebo effect’ –i.e. those who have wasted their money on these devices need to justify that expenditure so put down any drop in their energy bills to their ‘power saver’, regardless of the actual reason.

Additional comments

In direct-current circuits, power (P) is simply the product of the supply voltage (E) and the load current (I):


…which is why many people assume that a reduction in the load current will result in a reduction in power and, therefore, the energy consumed by the load.

But, in alternating-current circuits, power (P) is the product of the supply voltage (E), the load current (I), and the power factor of the load (cos φ):


For a given supply voltage, ‘improving’ (increasing) the power factor acts to reduce the supply current… so there is no change whatsoever to the power of the circuit. If there is no change in power, then there can be no change to the energy consumed.

For a far-more detailed look at Power-Factor Correction, see the relevant chapter in my book: An Introduction to Electrical Science, published by Routledge.


Since writing this page, I have come across an advertisement for an American product, the PowerSaver 1200, which is worth commenting on.

Like the ‘energy saver’, described above, the device contains a capacitor for power-factor improvement. Unlike that device, however, it is significantly-better built, but being ‘better built’ doesn’t means it actually does what its manufacturer claims that it does!

It’s worth reading the manufacturer’s ‘explanation’ for how it works, which I reproduce below. It’s complete nonsense, and has clearly been written by someone with absolutely no knowledge of electrical engineering.

Motors in your home are inefficient and consume more energy than they need (1).  By using the same technology your power company is using (to make their energy grids more efficient & increase profits), we can help you reduce your power consumption (2) (by installing our PowerSaver 1200) and YOU end up keeping more of your hard-earned dollars in your pocket. 

When motors or appliances on your property require power, they demand energy (3) through the wiring in your home.  The amount of watts your property consumes is measured at your power meter and you are billed for the watts your home or business has used (4).  The power company does not have the ability to tell the difference between an old inefficient refrigerator or a new energy efficient refrigerator other than how many kilowatts it consumes (or how many watts were demanded and measured at the meter).

By making your air conditioner, heat pump, pool/Jacuzzi pump, and other motor-driven appliances and equipment more energy efficient (5), you are billed less from your power provider.

The PowerSaver 1200 recycles (otherwise lost energy/watts) and releases it back to your motors, appliances, and motor-driven equipment/machinery when needed (6).  By doing so, this recycling process reduces the amount of heat on the wires and the motors in your home or business. Reducing this heat (kilowatts) will lower your electricity bill.  By making the motors on your property more efficient, they run cooler which lengthens the life of them.

Okay, let’s examine this ‘explanation’ of how this device works… I’ve highlighted this explanation’s ‘questionable’ parts, below:

(1) ‘…motors in your home are inefficient and consume more energy than they need.’  Well, that’s true of all motors, of course; they always consume more energy than they deliver to their mechanical load. But it’s a mistake to believe than power-factor improvement changes that, and improves their ‘efficiency’. ‘Efficiency’ is the ratio of output power to input power. In this context, ‘output power’ and ‘input power’ describes ‘real power’, expressed in watts. Power-factor improvement only affects the motor’s ‘apparent power‘, measured in volt amperes. It has NO effect, whatsoever, on the motor’s true power measured in watts. The writer obviously is not aware of the difference!

(2) ‘…we can help you reduce your power consumption.’  This is a classic error, written by individuals who know very little about electrical engineering. What’s wrong with it? Well, quite simply, you do not ‘consume power’! ‘Power’ is simply a rate: the rate at which you consume energy. So, here, the writer has confused ‘power’ and ‘energy’, probably because he doesn’t understand the difference! And, the only way to reduce the power of your load, is to reduce your load!!!

(3) ‘...when motors or appliances on your property require power, they demand energy’. This sentence makes no sense whatsoever. When motors or appliances ‘demand energy’, they require ‘energy’, not ‘power’. An absolutely brainless sentence!

(4) ‘…The amount of watts your property consumes is measured at your power meter and you are billed for the watts your home or business has used’.  Pretty basic mistakes, once again. ‘Watts’ (power) aren’t ‘consumed’ and homes aren’t equipped with ‘power meters’. It’s ‘kilowatt hours’ (energy) that are ‘consumed’, and they are measured with an ‘energy meter’! And energy meters measure the amount of ‘kilowatt hours’ (not ‘watts’) your home or business consumes. Again, the writer is unaware of the difference between power and energy, kilowatts and kilowatt hours, and the fact that the meter at your property is an ‘energy meter’, not a ‘power meter’.

(5) ‘…By making your air conditioner, heat pump, pool/Jacuzzi pump, and other motor-driven appliances and equipment more energy efficient (4)’. Power-factor correction does NOT make your motors ‘more energy efficient’.

(6) ‘…The PowerSaver 1200 recycles (otherwise lost energy/watts) and releases it back to your motors, appliances, and motor-driven equipment/machinery when needed ‘. This is complete and utter nonsense. Power-factor correction does NOT ‘recycle lost energy’ and ‘release it back to your motors…’! This statement is scientific drivel!