The influence of source impedance on the performance of a fixed filter-thyristor controlled reactor (FF-TCR) type compensator to improve the power factor of a thyristor controlled inductive load has been described. It is shown that the compensator gives better power factor improvement at higher source impedance, i.e. with a weak supply system. However, even with a small source impedance (i.e. a good supply system), a reasonable improvement in power factor is realized. The FF-TCR compensator keeps the distortion of the terminal voltage waveform within reasonable limits. The results obtained from the analysis of the lossy FF-TCR compare very well with the results obtained experimentally. This type of compensator is recommended strongly for industrial use.