United States Transformer Market Forecast 2025-2033

The United States Transformer Market is anticipated to grow to US$ 33.25 billion by 2033 from US$ 19.95 billion in 2024, growing at a CAGR of 5.84% during 2025-2033. The driving factor is increasing electricity demand, upgrade of the aging power grid, and rising investments in renewable energy infrastructure. Demand is also sustained by utility-scale projects, urbanization, and electrification of transportation and industrial applications throughout the U.S.

United States Transformer Market Overview

A transformer is an electrical machine employed to transmit electrical energy from one or more circuits to another via electromagnetic induction. It operates by stepping up or stepping down voltage levels without modifying the frequency, and hence it is critical for effective transmission and distribution of power. Transformers find extensive applications in power plants, substations, industrial units, commercial complexes, and residential quarters to make sure that electricity is supplied safely and effectively.

Transformers are essential to the operation of the US national power grid. With growing energy needs, the transition to renewable energy sources, and the electrification of manufacturing and transportation, transformers have become increasingly important. The nation's aging grid infrastructure also needs major overhauls, adding to transformer demand. Distribution transformers enjoy widespread use in residential and citywide networks, while power transformers play a pivotal role in handling long-distance transmission. As the development of smart grid continues, the U.S. industry is also witnessing an increase in advanced, energy-saving, and eco-friendly transformer technology.

United States Transformer Market Growth Drivers

Grid Modernization and Infrastructure Renewal

The American electrical grid is aging, and most transformers are well past their lifespan. The renewal of this infrastructure is vital to enhancing energy reliability, efficiency, and safety. State and federal governments are providing substantial funding for modernization, such as transformer replacement and the adoption of smart grid technologies. Both power and distribution transformers with remote monitoring and automatic control capabilities are needed for these upgrades. With utilities trending toward digital and decentralized grids, advanced transformer demand will spike across the country. More than 70% of power transformers in the United States are more than 25 years old and in need of replacement. By 2025, replacing these transformers and the grid will cost $944 billion, much of which many utilities and agencies might not be able to afford.

Growth of Renewable Energy Integration

The fast growth of solar, wind, and other renewable resources is remodeling the U.S. power grid. These decentralized and volatile energy sources need transformers that can accommodate bidirectional energy flow and changing voltages. Sophisticated transformers are required to interface renewable installations with the main grid while ensuring stability and power quality. With the U.S. transitioning towards net-zero emissions, renewable integration will continue to create demand for both conventional and advanced green-friendly transformers in the country. October of 2024, Lightsource BP, a BP subsidiary, has strengthened its onshore renewable energy footprint with a 62GW development pipeline in 19 nations, including 28 solar projects in the US. This expansion will substantially increase the use of transformers in the U.S.

Expansion in Electric Vehicle (EV) Infrastructure

Increased adoption of electric vehicles is putting more pressure on local and regional power grids. With the proliferation of EV charging stations in urban and suburban regions, the demand for medium and high-capacity distribution transformers is increasing. Transformers maintain high-charging stations and voltage stability during peak hours. Government incentives and private investment in the growth of EV infrastructure will drive the demand for medium and low-voltage transformers specific to this new industry, especially in transit areas and residential neighborhoods. February 2025, The Federal Highway Administration (FHA) suspended fresh funding for state EV charging initiatives while the United States Department of Transportation (USDOT) evaluates the NEVI Formula Program's policies.

United States Transformer Market Challenges

Supply Chain Limitations and Raw Materials Shortages

The U.S. transformer market continues to experience disruption from shortages of raw materials such as copper, steel, and silicon steel. Component delays, combined with international bottlenecks in shipping, have pushed lead times and costs higher. Manufacturers are having trouble keeping pace with increasing utility and developer demand. Relying on foreign suppliers creates an added risk. All of these limitations are hampering modernization initiatives and may slow the rate of upgrade of the grid unless domestic manufacturing is increased.

Environmental and Regulatory Compliance

Transformer builders have to adhere to strict environmental standards for oil leakage, energy efficiency, and greenhouse gas emissions. Aiding the U.S. Department of Energy (DOE) efficiency standards and following EPA regulations needs constant redesign and innovation, adding costs of production. Lower-environmental-impact transformers like dry-type or green-friendly liquid-cooled systems are making inroads but involve greater investment. These regulatory demands are challenging small manufacturers and may decelerate new product adoption in cost-conscious markets.

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United States Air-cooled Transformer Market

Air-cooled (dry-type) transformers are more and more the choice in the United States because they are safe, environmentally friendly, and require minimal maintenance. Suitable for indoor use in hospitals, data centers, commercial complexes, and educational institutions, these transformers prevent the possibility of oil leaks and fire accidents. Their compactness and applicability in limited spaces are highly compatible with urban infrastructural requirements. As the emphasis on green building practices and energy efficiency regulations increases, the usage of air-cooled transformers is increasing consistently in various sectors of the U.S.

United States Power Transformer Market

Power transformers are indispensable to the U.S. transmission grid, facilitating efficient long-distance transmission of electricity at high voltage levels. As energy consumption grows, transmission grid modernization, and integration of renewable power sources, there is a growing need for high-capacity transformers. Utilities are making investments in smart grid technologies, which need advanced, high-efficiency transformers with better insulation and digital monitoring capabilities. As old power infrastructure is retired and new power facilities enter service, power transformers continue to be a leading growth segment in the American market.

United States Three Phase Transformer Market

Three-phase transformers are used extensively throughout the U.S. industrial, commercial, and utility industries because of the capability to supply large electrical loads effectively. These systems have improved energy distribution and reduced losses over single-phase counterparts and are suitable for heavy equipment, HVAC equipment, and large buildings. Increased manufacturing activity, data centers, and skyscrapers are driving their demand. With increasing complexities in power systems and their decentralization, three-phase transformers remain integral to power supply.

California Transformer Market

California, as a clean energy and electrification leader, is propelling tremendous growth in the transformer market. The state's ambitious renewable energy goals, electric vehicle infrastructure planning, and smart grid programs necessitate advanced transformer technology. Wildfire risk reduction strategies also call for high-efficiency and resilient transformers to maintain reliable service. California's population density urban areas, heavy energy consumption, and regulatory requirements are further leading to the installation of eco-friendly and high-performance transformers both in utility and commercial industries.

New York Transformer Market

New York's energy transition focus, old grid modernization, and smart city initiative is developing a strong market for transformers. New York's Climate Leadership and Community Protection Act (CLCPA) aims for a carbon-zero electricity system by 2040, which will require extensive deployment of renewable energy and energy storage - both of which are dependent greatly on transformers. In cities such as New York City, small, noiseless, and eco-friendly transformers are highly sought. Investments in electrification of buildings and upgrading public transportation are contributing to market growth additionally.

New Jersey Transformer Market

New Jersey's market for transformers is increasing because of infrastructure growth, utility grid expansion, and investment in renewable energy. The state's plans to increase offshore wind capacity and solar installations require cost-effective transformer systems for grid connection. Also, suburban growth and EV adoption are driving demand for residential and commercial distribution transformers. Utilities in New Jersey are investing in smart grid upgrades to enhance reliability and resilience, including replacing legacy transformers with advanced, digitally enabled systems.

Recent Development in the U.S. Transformers Market

Hitachi Energy is going to invest USD 37 million in December 2022 to expand and upgrade its power transformer manufacturing plant in South Boston, Virginia, for increasing demand from utility customers, renewable energy, and data centers.

Hitachi Energy in April 2023 revealed more than USD 1.5 billion in investments to increase global transformer production capacity by 2027 to meet rising demand and support electrification initiatives. This is on top of the USD 3 billion that has been set aside for furthering energy system electrification fueled by the energy transition.

In Nov 2024,Hatichi ABB unveiled a new series of transformers specifically designed for floating offshore. The products optimize wind energy harvesting in harsh weather conditions to enable a shift towards a sustainable energy future.

In December 2024, Tietoevry and Siemens collaborated to improve digital transformation in the power utilities business in Northern and Central U.S. They will use Siemens' Gridscale X software and Tietoevry's IT capabilities to support Nordic grid operators in dealing with energy transition issues.

In July 2024, TenneT and Siemens Energy partnered to reduce CO2 emissions from Siemens' Nuremberg transformer factory. The project milestone is to manufacture transformers made of 100% recycled copper, with 52 done by 2030 by TenneT. Each will save 100 metric tonnes of emissions.

September 2024 saw GE Vernova unveil plans to expand its Stafford, UK transformer manufacturing facilities to support increasing demand for HVDC transmission systems that benefit renewable energy projects in the U.S., Asia, and the UK.

December 2024: Siemens and Tietoevry, a premier Nordic digital engineering and software business, have partnered to drive the digital transformation of the Northern and Central U.S. power utilities industry. Tietoevry will be enhancing new capabilities to their solutions with the help of Siemens' Gridscale X software platform and their own IT services to assist grid operators in the Nordics to manage their grids effectively and respond to challenges surrounding the energy transition.

In July 2024, TenneT and Siemens Energy have entered into an agreement to lower their CO2 footprint at the Siemens transformer factory in Nuremberg. A first milestone of the cooperation is the manufacturing of transformers made of 100% recycled copper. From now on, Siemens Energy will manufacture all future transformers for TenneT from copper. By 2030, TenneT aims to install approximately 52 transformers from Siemens Energy, each of which will equip 72 tonnes of recycled copper. TenneT will reduce significantly CO2 emissions through the grid expansion using these transformers. Siemens Energy and TenneT can cut down 100 metric tonnes of CO2 emissions per transformer alone.

US-headquartered GE Vernova in September 2024 has extended its current transformer manufacturing facilities in Stafford, UK. In a press release, the company said the expansion is intended to drive the high-growth demand for HVDC transmission systems that will power renewable energy projects across U.S., Asia and North America, in addition to underpinning the UK's transition to a more sustainable energy system. The expansion targets two strategic locations of its Electrification Systems' Grid Solutions business in Stafford.

Market Segmentation

Power Rating

• Large
• Medium
• Small

Cooling Type

• Air-cooled
• Oil-cooled

Transformer Type

• Power Transformer
• Distribution Transformer

Phase

• Three Phase
• Single Phase

Top 10 States

• California
• Texas
• New York
• Florida
• Illinois
• Pennsylvania
• Ohio
• Georgia
• Washington
• New Jersey
• Rest of United States

Key Players Analysis (Overviews, Key Persons, Recent Developments, SWOT Analysis, Revenue Analysis)

• Siemens AG
• ABB Ltd
• General Electric Company
• CG Power and Industrial Solutions Ltd
• Hyundai Electric & Energy Systems Co. Ltd
• Toshiba Corp.
• Hyosung Corp.
• Bharat Heavy Electricals Limited
• Schneider Electric SE