Report Overview

United States Power and Distribution Transformer Market – Industry Trends & Forecast Report, 2030

United States Power and Distribution Transformer Market size was estimated at USD 3.72 billion in 2023. During the forecast period between 2024 and 2030, United States Power and Distribution Transformer Market size is projected to grow at a CAGR of 3.7% reaching a value of USD 4.79 billion by 2030. Prominent drivers of the market include the rising demand for transformers due to increasing electrification in buildings and transportation, along with the growing integration of renewable energy sources like wind and solar into the power grid. The modernization of aging grid infrastructure and the need for improved resilience against extreme weather events are also boosting market growth. The National Renewable Energy Laboratory (NREL) predicts a significant increase in distribution transformer capacity by 2050 to meet surging energy demand, driven by electrification and the need for a more resilient power grid. Despite supply chain shortages leading to higher prices and longer lead times for transformer replacements, the market's growth is further fueled by ongoing innovations, sustainability efforts, and increasing consumer demand for customizable solutions.

Power and Distribution Transformer – Overview

A power and distribution transformer is an electrical device used to transfer electrical energy between two or more circuits through electromagnetic induction. Power transformers are primarily used in high-voltage transmission networks to step up (increase) or step down (decrease) voltage levels, facilitating the efficient transmission of electricity over long distances. Distribution transformers, on the other hand, are used in lower voltage distribution networks to deliver electricity from the transmission system to the end-users, stepping down the voltage to safe levels suitable for residential, commercial, or industrial use. Both types are essential for efficient energy transmission and distribution, ensuring stable and reliable power supply.

United States Power and Distribution Transformer Market

Growth Drivers

Rising Electricity Demand

The rising electricity demand in the United States is significantly boosting the growth of the power and distribution transformer market. A recent report from the National Infrastructure Advisory Council (NIAC) highlights the critical shortage of transformers, driven by increased electrification, growing renewable energy generation, and the expansion of large-load customers such as data centers. This surge in demand has created a supply imbalance, with lead times for new transformers stretching from two to five years. Compounded by supply chain disruptions from the COVID-19 pandemic and the aging infrastructure, the situation has raised concerns about grid stability. Additionally, the domestic transformer manufacturing industry faces challenges in attracting and retaining skilled workers, and limited automation in production has hindered efficiency gains. To address these issues, NIAC recommends increasing domestic transformer production, incentivizing the workforce, and standardizing transformer design to reduce production complexity. The growing electricity demand is not only driving market growth but also necessitating a strategic response to ensure the future reliability of the United States power grid.

Challenges

High Initial Costs

High initial costs significantly restrain the growth of the United States Power and Distribution Transformer Market. The manufacturing industry faces substantial capital investment barriers, resulting in a limited supplier pool and increasing lead times for transformers, which have tripled since 2021. Additionally, the costs of core commodities, particularly steel and copper, have historically driven transformer pricing, and even though their prices have stabilized, the overall pricing for transformers has surged, with supplier margins now accounting for about 20% of total costs. While recent Department of Energy rulings on energy efficiency standards offer some relief, the prevailing high initial costs continue to hinder the market's ability to meet rising demand driven by electrification and grid modernization efforts.

Impact of Escalating Geopolitical Tensions on United States Power and Distribution Transformer Market

Escalating geopolitical tensions among countries across regions could have a significant impact on the growth of United States Power and Distribution Transformer Market. These tensions may lead to disruptions in supply chains, particularly affecting the availability of critical materials like steel and copper, essential for transformer manufacturing. Additionally, uncertainties related to trade policies and tariffs could result in increased costs for raw materials, ultimately driving up transformer prices. Furthermore, heightened geopolitical risks may compel manufacturers to diversify their supply chains, potentially leading to delays and increased operational complexities. As a result, these factors could hinder the market's ability to meet the rising demand driven by electrification and grid modernization initiatives.

United States Power and Distribution Transformer Market

Segmental Coverage

United States Power and Distribution Transformer Market – By Type

By type, United States Power and Distribution Transformer Market is bifurcated into Power Transformer and Distribution Transformer segments. The distribution transformer segment holds a higher share in United States Power and Distribution Transformer Market by type. It can be attributed to the rising demand for efficient power distribution systems and the ongoing expansion of electrical grid infrastructure. Urbanization, industrialization, and the increasing adoption of renewable energy sources necessitate the modernization of existing power grids. Additionally, initiatives aimed at enhancing energy efficiency and reducing transmission losses are driving the demand for advanced distribution transformers. As utilities and industries invest in upgrading their electrical networks, the distribution transformer market is expected to experience substantial growth.

United States Power and Distribution Transformer Market – By Rating

By rating, United States Power and Distribution Transformer Market is divided into 650 kVA, 651–2500 kVA, and above 2500 kVA segments.

United States Power and Distribution Transformer Market – By Cooling System

Based on cooling system, United States Power and Distribution Transformer Market bifurcated into Dry Type and Liquid Type segments.

United States Power and Distribution Transformer Market – By Application

On the basis of application, United States Power and Distribution Transformer Market split into Power Utilities and Industrial segments. The industrial segment is expected to hold a higher share in United States Power and Distribution Transformer Market by application during the forecast period. The demand for distribution transformers in the industrial sector is driven by the needs of manufacturing plants, refineries, and large-scale production units, which require robust transformers that can handle significant power loads and maintain consistent power quality. These transformers must be engineered to meet the rigorous demands of high energy consumption and continuous operation typical in industrial processes, where reliability is crucial to prevent operational downtime and financial losses. Furthermore, the rising trend of industrial automation and the adoption of advanced manufacturing technologies increase the need for high-capacity transformers that can support sophisticated machinery. Innovations in transformer technology, such as improved cooling systems and enhanced insulation materials, are also enhancing the efficiency and longevity of transformers used in these settings.

Competitive Landscape

Major players operating in United States Power and Distribution Transformer Market include Siemens AG, Kirloskar Electric Company Ltd, General Electric Company, Hyundai Electric & Energy Systems Co. Ltd, Schneider Electric SE, Southwest Electric Co., Hitachi Ltd, Emerson Electric Co., Eaton Corporation PLC, and Toshiba Corp. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In April 2024 - Hitachi Energy announced an investment of over USD 1.5 billion to enhance its global transformer manufacturing capacity by 2027, addressing the rising demand for sustainable energy solutions.

• In January 2024 – United States Senators Sherrod Brown (D-OH) and Ted Cruz (R-TX) introduced the Distribution Transformer Efficiency & Supply Chain Reliability Act of 2024, aimed at strengthening the United States transformer supply chain critical for energy grids. The bipartisan legislation proposes new, realistic energy efficiency standards that would stabilize domestic transformer manufacturing while addressing concerns over a recent Department of Energy proposal that could disrupt production and threaten United States steel jobs.

Scope of the Report

By Type

• Power Transformer

• Distribution Transformer

 By Rating

• 650 kVA

• 651–2500 kVA

• Above 2500 kVA

 By Cooling System

• Dry Type   

• Liquid Type

By Application

• Power Utilities

• Industrial

1. Research Framework
   1. Research Objective
   2. Product Overview
   3. Market Segmentation
2. Executive Summary
3. United States Power and Distribution Transformer Market Insights
   1. Industry Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Infrastructure development & economic diversification
         2. Rising electricity demand
         3. Increasing focus on grid modernization
      2. Restraints
         1. High initial costs
         2. Fluctuating oil prices
         3. Competition from international players
      3.  Opportunities
         1. Growing trend of smart transformers with remote monitoring and self-regulation capabilities
         2. Government initiatives promoting energy-efficient transformers
         3. Government support for local transformer production
      4. Challenges
         1. Lack of skilled personnel for transformer installation, maintenance, and repair
         2. Increasing use of smart transformers raises concerns about cyberattacks
   3. Technological Advancements/Recent Developments
   4. Regulatory Framework
   5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
4. United States Power and Distribution Transformer Market: Marketing Strategies
5. United States Power and Distribution Transformer Market: Pricing Analysis
6. United States Power and Distribution Transformer Market Overview
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Type
         1. Power Transformer
         2. Distribution Transformer
      2.  By Rating
         1. 650 kVA
         2. 651–2500 kVA
         3. Above 2500 kVA
      3.  By Cooling System
         1. Dry Type    
         2. Liquid Type
      4. By Application
         1. Power Utilities
         2. Industrial
7. Competitive Landscape
   1. List of Key Players and Their Products
   2. United States Power and Distribution Transformer Company Market Share Analysis, 2023
   3. Competitive Benchmarking, By Operating Parameters
   4. Key Strategic Developments (Mergers, Acquisitions, Partnerships)
8. Impact of Escalating Geopolitical Tensions on United States Power and Distribution Transformer Market
9. Company Profiles (Company Overview, Financial Matrix, Competitive landscape, Key Personnel, Key Competitors, Contact Address, and Strategic Outlook, and SWOT Analysis)
   1. Siemens AG
   2. Kirloskar Electric Company Ltd
   3. General Electric Company
   4. Hyundai Electric & Energy Systems Co. Ltd
   5. Schneider Electric SE
   6. Southwest Electric Co.
   7. Hitachi Ltd
   8. Emerson Electric Co.
   9. Eaton Corporation PLC
   10. Toshiba Corp
   11. Other prominent players
10. Key Strategic Recommendations
11. Research Methodology
    1. Qualitative Research
       1.  Primary & Secondary Research
    2.    Quantitative Research
    3.    Market Breakdown & Data Triangulation
       1.  Secondary Research
       2.  Primary Research
    4.    Breakdown of Primary Research Respondents
    5.    Assumptions & Limitations

*Financial information of non-listed companies can be provided as per availability.

**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable.

List of Figures

Figure 1       United States Power and Distribution Transformer Segmentation

Figure 2       United States Power and Distribution Transformer Market Value Chain Analysis

Figure 3       Company Market Share Analysis, 2023

Figure 4       United States Power and Distribution Transformer Market Size, By Value (USD Billion), 2019–2030

Figure 5       United States Power and Distribution Transformer Market Share, By Type, By Value (USD Billion), 2019–2030

Figure 6       United States Power and Distribution Transformer Market Share, By Rating, By Value (USD Billion), 2019–2030

Figure 7       United States Power and Distribution Transformer Market Share, By Cooling System, By Value (USD Billion), 2019–2030 

Figure 8       United States Power and Distribution Transformer Market Share, By Application, By Value (USD Billion), 2019–2030

List of Tables      

Table 1        United States Power and Distribution Transformer Market Size, By Value (USD Billion), 2019–2030

Table 2        United States Power and Distribution Transformer Market Share, By Type, By Value (USD Billion), 2019–2030

Table 3        United States Power and Distribution Transformer Market Share, By Rating, By Value (USD Billion), 2019–2030

Table 4        United States Power and Distribution Transformer Market Share, By Cooling system, By Value (USD Billion), 2019–2030

Table 5        United States Power and Distribution Transformer Market Share, By Application, By Value (USD Billion), 2019–2030

Table 6        Siemens AG Company Overview

Table 7        Siemens AG Financial Overview

Table 8        Kirloskar Electric Company Ltd Company Overview

Table 9        Kirloskar Electric Company Ltd Financial Overview

Table 10      General Electric Company: Company Overview

Table 11      General Electric Company Financial Overview

Table 12      Hyundai Electric & Energy Systems Co. Ltd Company Overview

Table 13      Hyundai Electric & Energy Systems Co. Ltd Financial Overview

Table 14      Schneider Electric SE Company Overview

Table 15      Schneider Electric SE Financial Overview

Table 16      Southwest Electric Co. Company Overview

Table 17      Southwest Electric Co. Financial Overview

Table 18      Hitachi Ltd Company Overview

Table 19      Hitachi Ltd Financial Overview

Table 20      Emerson Electric Co. Company Overview

Table 21      Emerson Electric Co. Financial Overview

Table 22      Eaton Corporation PLC Company Overview

Table 23      Eaton Corporation PLC Financial Overview

Table 24      Toshiba Corp Company Overview

Table 25      Toshiba Corp Financial Overview