This paper briefly describes the most important definitions of reactive power (Iliovici, Budeanu, and Emanuel), and answers the question: which formula leads to minimization of the cost and size of hybrid power conditioning system for wide-spread use, with passive reactive power compensator and active power filter. The simulation results show that the Iliovici's formula is the best one in this respect and should be used in industrial applications. In this paper the simulation results are based on concept presented in [1] (accepted for