Load banks are used to test electrical power sources like generators by applying an electrical load and dissipating the energy as heat. Resistive load banks test at 100% kW but only 80% kVA due to unity power factor. Inductive load banks allow 100% kVA testing by providing lagging power factor. Capacitive load banks provide leading power factor testing. Proper load bank selection considers voltage, frequency, capacity, installation location, and control methods to accurately test power sources.