This paper presents an assessment of capacitor banks and Distribution Static Compensator (D-STATCOM) with respect to their impact on energy quality. Tests were done with capacitor banks built with electrolytic capacitors commonly used in industrial applications and a D-STATCOM. Experimental tests were performed for power factor correction in order to reduce the reactive power demanded from the electrical grid for inductive-resistive loads. For comparative purposes, the control of the D-STATCOM was set to operate with similar compensation conditions to that of the capacitor banks. Results show that under the same test conditions capacitor banks produce higher Total Harmonic Distortion (THD) than D-STATCOM.