Voltage drop is the reduction in voltage in an electrical circuit between the source and load. In electrical wiring national and local electrical codes may set guidelines for maximum voltage drop allowed in a circuit, to ensure reasonable efficiency of distribution and proper operation of electrical equipment (the maximum permitted voltage drop varies from one country to another).
Voltage drop may be neglected when the impedance of the interconnecting conductors is small relative to the other components of the circuit.
For example, an electric space heater may very well have a resistance of ten ohms, and the wires which supply it may have a resistance of 0.2 ohms, about 2% of the total circuit resistance. This means that 2% of the supplied voltage is actually being lost by the wire itself.
Excessive voltage drop will result in unsatisfactory operation of electrical equipment, and represents energy wasted in the wiring system. Voltage drop can also cause damage to electrical motors.
In electronic design and power transmission, various techniques are used to compensate for the effect of voltage drop on long circuits or where voltage levels must be accurately maintained. The simplest way to reduce voltage drop is to increase the diameter of the cable between the source and the load which lowers the overall resistance.