Nowadays, the power quality of the AC system has become of great importance due to the rapidly increased in electronic equipment, power electronics devices and high voltage power system equipment. Commercial and domestic industries in the country have large electrical loads which are generally inductive in nature causing lagging power factor which gives high penalties to the consumer by electricity board. Power factor correction is the absorbing capacity of the reactive power produced by a load. In case of fixed loads, this can be done manually by switching of capacitors, however in case of rapidly varying and distributed loads; it becomes difficult to maintain a power factor by manually switching On/Off the capacitors in proportion to the variation of the load within an installation. This drawback is overcome by using an APFC. In this paper, measuring of power factor is done by using a PIC microcontroller and trigger required capacitors in order to compensate reactive power and bring power factor approx. to unity.