A capacitor is basically an electrical spring. It stores an electrical charge when the voltage increases, and it releases that electrical charge when the voltage starts to drop. Capacitors are used smooth out the output of DC power supplies. When a capacitor is connected in an AC circuit it alternately charges and discharges with the AC current. This has the effect of causing voltage to peak after the current peaks. Note that this is exactly the opposite of inductive reactance which causes current to peak after the voltage peaks. Adding a capacitor in series with an inductive load offsets the inductive reactance so that the voltage and current peak together. Capacitors are used with PSC motors to improve their efficiency by offsetting the inductive reactance of the motor windings. This is why PSC motors became the standard motor for compressors and fans. Several years ago I had a furnace with a shaded pole indoor blower motor. When it died, I decided to replace it with a similar size PSC motor. The replacement PSC blower motor was slightly larger in horsepower than the original shaded pole motor, but drew only half as many amps while operating. Of course today PSC motors are being replaced with brushless DC, or ECM motors for efficiency savings that are equally dramatic.
You can do a demonstration of the effects of inductive and capacitive reactance by wiring a 60 watt light, a 120 volt 10 watt unit bearing shaded pole motor, and a 10 MFD run capacitor in series to a 120 volt power source. Wire a switch in parallel to the shaded pole motor and another switch in parallel with the capacitor. The switches will allow you to take the motor or capacitor out of the circuit by simply bypassing them. Ideally, you want to use an oscilloscope to show the source voltage and the voltage across the light. The light will remain in phase with the circuit current since the light is a resistive load. The phase relationship between the source voltage and the voltage across the light will show the relationship between voltage and current. Operating the switches will show the effects of inductive reactance, capacitive reactance, and the combination of the two. Even without an oscilloscope you can show that the voltage across the three devices adds up to more than the applied voltage. This shows why run capacitors must be rated for a higher voltage than the voltage to the unit.I did a powerpoint presentation for the National HVACR Educators & Trainers Workshop this past March that includes an interactive virtual lab to show inductive and capacitive reactance. You can download the presentation at the HVAC Excellence web site. It is listed in the free downloads as "Practical Labs." Students can click on the switches to control them and see the results. For more ideas on teaching alternating current fundamentals check out Unit 29 Electrical Power and Circuits in Fundamentals of HVAC/R.