When there is an inductive element in the circuit, the current lags behind the voltage. an ideal inductor will make the current lag behind the voltage by 90 degrees..
a capacitive element on the other hand will make the current lead the voltage (ideally by 90deg). That's why capacitors in parallel with the system are used a lot for power factor correction
Actually, it can lead or lag. Power factor is said to be leading if the load is capacitive, and lagging if the load is inductive. Since most reactive loads (like motors) are inductive, the power factor in most buildings is lagging.
Additional Information...
The term 'leading' or 'lagging' with regard to power factor is determined by the current waveform relative to the voltage waveform. If the current leads the voltage, then the load has a leading power factor; if it lags the voltage, then it has a lagging power factor.
The power factor of a load is the cosine of the angle by which the load current lags or leads the supply voltage. So if they are in phase (phase angle is zero), then the power factor must be unity (1).
Induction motor comprised inductor as the most part in it and an inductor has the characteristic to oppose the change of current, i.e., it has lagging power factor as current lags behind the voltage. Hence, an induction motor works on lagging power factor.
'Current lags voltage' means that in the AC cycle the voltage peaks and the current peaks a little time (a fraction of a cycle) later. This happens with electrical loads like motors. When the current lags, there is a small period in each half-cycle when the voltage has reversed and the current has not reversed yet. This causes power to flow back into the supply from the load. So there is a loss of average power fed to the load for a given voltage and current. In this situation the power is the voltage times the current times the power factor, and the power factor is the cosine of the angle by which the current lags the voltage (counting 360 degrees as a full cycle).
There is no SI symbol, as such, for power factor. As power factor is the cosine of the phase angle (the angle by which the load current leads or lags the supply voltage), power factor is normally written as 'cos' followed by the lower-case Greek letter we pronounce 'phi' (I've no idea how to type a Greek letter in this answer!).
Power factor in any circuit is the ratio of the load's true power to its apparent power. It's also the cosine of the phase angle. In L-R circuits, it's described as a 'lagging power factor', because the load current lags the supply voltage.
As power factor is the cosine of the load's phase angle (the angle by which the load current lags or leads the supply voltage), it is impossible for power factor to exceed unity (1), so your question doesn't really make any sense.
When a synchronous generator is running at lagging power factor the current it supplies lags its terminal voltage. Thus it acts as a source of reactive power, or magnetizing vars. Reactive power is needed to create the magnetic fields in devices such as transformers and induction motors. The Power factor of a utility depends on the type of load it supplies. Usually the Loads on utility are inductive loads (where the current lags behind the Voltage) and hence the power factor at which the utility operates is lagging. Most loads connected to utility are inductive loads like motors, fans, rolling mills which cause the power factor of the utility to be of lagging in nature.
As the name implies, motors are resistive-inductive loads, which means that their load current must lag the supply voltage. By definition, a lagging power factor is the cosine of the angle by which the load current lags the supply voltage.
Power factor is the cosine of the angle by which the load current lags or leads the supply voltage. It is expressed as a per-unit value: e.g. 0.8; in the past it has been expressed as a percentage value , e.g. 80%.
The coil consists of inductance. Due to inductance the current lags the voltage. So, the power factor is lagging.
You do not 'develop' power factor; it is naturally-occurring in the sense that it is the ratio between the true power and the apparent power of a load in an a.c. system. It is numerically equal to the cosine of the phase angle -i.e. the angle by which the load current lags or leads the supply voltage.You can 'modify' the power factor of a circuit, for example, by adding capacitance to an inductive circuit, or the other way around.
Power factor measures the phase difference between voltage and current. If they are in phase the Power Factor is one. If the current and voltage are out of phase the power factor is between zero and one. You can describe the PF by saying the current lags the voltage with a PF = .8 or the voltage leads the current with a .8 PF.