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Capacitor banks are the most common devices for correcting lagging power factor caused by inductive loads such as motors and transformers. By supplying leading reactive power, capacitors offset the lagging reactive power, improving overall power factor. Harmonic filters (A) address waveform distortion but are not primarily used for power factor correction. Transformer tap changers (C) adjust voltage levels, and voltage regulators (D) stabilize voltage but neither directly impact power factor. For Certified Energy Managers, power factor correction is essential because poor power factor increases apparent power (kVA) demand, leading to higher utility charges and potential equipment inefficiencies. By installing capacitor banks, energy managers can reduce costs, increase system capacity, and improve voltage stability. Understanding power factor correction is critical on the CEM exam, as it integrates both technical and economic considerations.