Understanding True Power factor and Displacement power factor.

Power Factor can be defined as the cosine of the angle between the current and the voltage.  This power factor is also known as the Displacement power factor.

The conventional measurement of the power factor is relevant only for loads that are linear and the waveforms are purely sinusoidal.  With the increase in non-linear loads such as inverters, drives, etc this definition of the power factor is not adequate.  This is because the harmonics have an impact on the power factor.

Thus, the total harmonic distortion should also be considered while calculating power factor. 

How is True Power Factor different from Measured Power Factor ?

The true power factor refers to the measured power factor at the system frequency which is adjusted for the Harmonic distortion

Thus for loads which have high harmonic content, the True Power factor needs to be calculated.