As you know, power factor is the cosine of the phase angle between the sinusoidal voltage and current waves. The power delivered by down an electrical line is V*I*cos(phase angle), which means that the current needed to deliver that power increases as the phase angle increases. And because line losses are proportional to the square of the current, then poorer power factors do increase losses some. More importantly, it also increases var (volt-amps reactive) consumption which increases the voltage drops from one end of the line to another. These are the reasons why power companies are so interested in controling phase angles throughout their electrical systems (mostly through shunt capacitors).
As KMurphy has indicated, power companies set limits for power factors on their larger industrial loads. Their tariffs usually allow them to charge for low power factor loads so that they can install some shunt capacitors to compensate (rather than roll that cost into the rates for other customers).
Motors work because of a linkage between the sinusoidal magnetic flux in the stator with the flux induced in the rotor. Synchronous machines use DC voltage to excite a fixed magnetic flux that locks in with the varying stator flux and applies a torque to the machine shaft. Induction motors have no exciter on their rotors; they have conducting bars arranged like a "squirrel cage" that circulate current induced by the stator flux that also establishes a flux for the rotor and a torque on the shaft. Induction machines by their nature have "lagging" power factors. All but the largest motors are induction machines. All the motors in your home (like your wash machine) are induction motors. Single-phase induction motors can not start up by themselves; they need two stator fluxes with a phase angle between them (the angle between phases on a three-phase system is 120 degrees). The capacitor is tied in series with a second starter winding. The capacitor shifts the phase angle in that winding enough to provide the torque to get the motor rolling, and is often opened after started.
Anyway, power companies generally don't charge residential customers for vars or power factor. Your house meter doesn't even measure them. Don't worry about power factor -- life is too short!
