This paper investigates the ability of correcting the power factor at the point of common coupling (PCC) of the source side using dynamic voltage restorer (DVR). By applying the phase angle control (PAC) method, the DVR compensating voltage will be injected with a specific phase angle and magnitude in series with the transmission line, which leads to a power factor angle shift of the resultant load voltage. As a result, the source voltage is always in phase with the source current under different load conditions, which means that the power factor correction is achieved at the PCC of the source side. A laboratorial prototype of the DVR is utilized to verify the proposed control algorithm. The experimental results validate that an approximate unity power factor can be maintained at the source side.