ghurd knows exactly what power factor means, for the rest of us the simple answer is that power factor is the difference between the phase angle of the current and the voltage with respect to the actual work being done by AC waveforms. To understand this you need to move beyond algebra and the simplified version of ohms law and move to calculus and "complex" math, but to keep it simple, in a purely capacitive or purely inductive circuit the voltage leads or lags the current by 180 degrees, and in theory, no "work" is done. If you simply measured the peak current and multiplied it by the peak voltage, you would get a very misleading representation of the power being consumed or produced. Power Factor is directly linked, though not necessarily a linear function of efficiency, in an AC electrical circuit. I think Victors question is actually about efficiency, and has little to do with Power Factors, so i will not expound further on PF.
Victor, there is a tremendous amount of discussion about the efficiency of "alternative energy" in this and all AE forums. Efficiency and storage are the evil subverters of AE. They are the crux of almost every sensible discussion about wind or solar power conversion. At the end of the day, if you can convert 25% of the available solar energy (wind IS solar energy) into electrical power, you have truly achieved something. If we start from the "source" (ie, the SUN) a more realistic efficiency would be more on the order of magnitude of 10^-12; that is to say, we can convert ~ 1 part in 1 trillion /M^2 of the available energy to electricity, and that estimate is +/- 10^-6 depending on where you take the initial measurement from. If we start at the Suns surface then our efficiency 90+ million miles away is less than if we start at the stratosphere where only a tiny portion of the energy from that M^2 actually lands. None of this means that solar energy is trivial, on the contrary, the amount that lands around us every day is phenomenal, but capturing 25% of what actually "lands" in our backyard is a tall order.
Hope this helps :-)