The electric meter is based on a PowerFactor of 0.8, meaning that
observed 100 watts of electric usage means only 80 watts was really
used, so the meter shows 80 watts. He thought he could get his house
setup so it could get a power factor of 1. So the house would use 80
watts, the meter would see 80 watts but since it still expected 0.8 PF
it would only show 64 watts used. So 16 watts would be taken for
free.

Energy meters measure energy ... they do not assume 0.8 or any other factor.