Grid operators bill consumption in kWh, but limit connection capacity to current (A) and thus indirectly to kVA. You use kW as useful power. If the power factor is low (e.g. due to reactive current or harmonics), more kVA is needed for the same kW. As a result, you hit the connection limit faster.
By improving the power factor, you can use more kW within the same connection capacity, without increasing the connection load.
