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our electrical equipment mainly operates at lagging power factor(i.e most of the equipment is inductive in nature).But as the system becomes more and more inductive the angle between voltage and current phasor increases.But we know that P=V*I*power factor .
Due to increase in angle between voltage and current phasor,power factor decreases,therefore for constant P & V(for an equipment to operate properly P & V is constant) equipment draws more current.To increase the power factor we connect a capacitor in parallel to the inductive load.
There for in system where inductive loads are more i.e the system is predominantly inductive it is better to operate equipment at leading power factor(one example of machine operating at leading power factor is overexcited synchoronous motor).
This is really simple. You should always be with a lagging factor. The reason is because leading factors could cause significant damage to electric machinery and more problematic, capacitors can explode with a overload in voltage.
Simpler yet, keep power factor at 1, I and V in phase. Eliminate reactive currents which lead to wasted power in the resistive transmission lines.