Answer:
Power factor is a measure of how far out of alignment current wave is from the voltage wave form, Ideal power factor is 1 to 1 or as with most meters simply 1. Ie both wave forms are insynch thus power used is accurate to power consumed.
As power factor starts to lead or lag it appears to the watt meter that more power is being used then is actually being consumed by the device. This means a larger bill for power that you didn't actually consume.
Highly inductive or capacitive loads cause power factor to go out of synch, if you are running a capacitive load you can realign power factor by adding an inductor or vice versa.