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The Capacitor acts as a torque to move the fan and 1 phase motor. If there is no capacitor both the fan and the 1-Phase motor will not rotate. The work of rotating fan & motor is done by the capacitor (dividing one phase into two).. In 3-Phase arrangement capacitance load i.e. capacitor is used to balance the inductance load. This leads to an improvement in the power factor and an improvement in voltage. Formula - PF = (KW/KVA).Improvement in power factor reduces consumers electricity bill and less loss to the power supply company with voltage correction.The consumer has to install the capacitors according to the capacity of the motor. Capacitors to the power supply companies are placed near the transformer according to the transformer capacity. The consumer has to install the capacitors according to the capacity of the motor. Power supply Companies have to place capacitors near the transformer commensurate with the capacity of the transformer. As a general rule Capacitors (KVAR) of one-fourth the capacity of the HP or KVA capacity of the transformer is used. A 10 horse power motor requires a capacitor of 2.5 KVAR Capacity. The cost of capacitors equates to saving in electricity bill of about one to two months. Generally 1 Amp. Current in 11 kV side is equivalent to 20 KVA and 16 KW load assuming PF 0.8 cost of 16 units in 1 hour is Rs 100. If capacitor saving 10 Amp. on an 11 KV feeder saves Rs 1000 in 1 hour and saving 20 ampere saves Rs 2000.