Why is capacitor placed in parallel for power factor correction?
Without the capacitor, the source has to provide all the energy (St): the actual energy consumed by the load (Pt) and the energy stored in the inductive part of the load (Qt). The inductive part makes the source supply a lot more current than necessary, since a lot of that current goes into setting up a magnetic field that stores some of the energy generated by the source.

With the capacitor in parallel, there is now an additional source of energy, which can take up some/all of the burden of supplying current to the inductive load (when it resists changes in current till it sets up its field), after which the source takes over again and recharges the capacitor. So the apparent power S (and thus energy) drawn from the source is reduced and is much closer to the true power P actually being used by the load.