? Transformers Market to Reach $103 Billion by 2031 | Smart Grids & Renewable Energy Drive Growth

The global transformers market will reach $103B by 2031, driven by rising electricity demand, smart grid expansion, and rapid industrial growth.”
— Allied Market Research

WILMINGTON, DE, UNITED STATES, November 28, 2025 /EINPresswire.com/ --

According to a recent report published by Allied Market Research, the transformers market size was valued at $58.6 billion in 2021 and is projected to reach $103.0 billion by 2031, registering a CAGR of 6.1% from 2022 to 2031. Rapid urbanization, significant demand for electricity, expansion of smart grid networks, and the rise of renewable energy system are shaping the global market landscape.

?? Introduction: What Are Transformers & Why Are They Essential?

A transformer is an electrical device that transfers energy between two or more circuits through electromagnetic induction. The invention of electromagnetic induction by Michael Faraday in 1831 laid the foundation for modern transformer design. Over the years, several variations of transformer systems were developed, each contributing to the current high-efficiency models used today.

Transformers operate on the principle of mutual induction, using primary and secondary windings connected by a magnetic core. Their key role is to increase or decrease voltage levels in electrical networks, ensuring safe, reliable, and efficient power distribution across residential, commercial, and industrial sectors.

Transformers are also widely used in renewable energy systems, manufacturing industries, and electric vehicle charging networks. The increasing deployment of power-hungry technologies and digital infrastructure continues to boost global demand for transformers.

? Market Dynamics

?? 1. Growing Demand for Electricity & Power Infrastructure

One of the major drivers of the transformers market is the continuous rise in electricity consumption worldwide. Expanding industries, increasing residential power needs, and urban infrastructure development are pushing utilities to invest heavily in power transmission and distribution networks.

?? 2. Smart Grid & Renewable Energy Expansion

Countries across North America, Europe, and Asia-Pacific are rapidly upgrading their energy systems. Smart grids require advanced transformers to enhance:

Power quality

Grid flexibility

Distributed generation

Renewable energy integration

In the U.S. and Europe, the rise in electric vehicles (EVs) has accelerated the need for EV charging infrastructure, increasing demand for high-efficiency transformers.

?? 3. Industrial & Manufacturing Growth

Transformers play a vital role in supporting industrial machinery, automation systems, and heavy equipment. As global manufacturing capacity expands—especially in India, China, and Southeast Asia—the need for reliable power systems boosts market growth.

?? 4. Challenges: High DC Voltage Risks

Despite strong growth trends, risks associated with high DC voltages and complex installation requirements remain a challenge. These factors may restrain the adoption of transformers in certain applications, though technological advancements continue to reduce these risks.

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?? Market Segmentation Overview

The transformers market is segmented by type, power rating, cooling type, number of phase, insulation type, application, and region.

?? 1. By Type

Distribution transformers

Power transformers

Others

The distribution transformers segment held the highest market share in 2021 due to strong demand across residential, commercial, and industrial sectors. Their widespread use in utility networks and renewable integration further enhances segment dominance.

? 2. By Power Rating

Small

Medium

Large

The small transformer segment captured over 40% of the market in 2021. Small transformers are widely used in rural electrification, local distribution networks, and small-scale industries.

??? 3. By Cooling Type

Oil-cooled

Air-cooled

The air-cooled segment held the largest share in 2021 and will grow at a CAGR of 6.3%. Air-cooled transformers are favored in renewable energy installations due to their:

Cost efficiency

High performance

Versatility

Low maintenance requirements

?? 4. By Insulation Type

Dry

Liquid-immersed

The dry-type transformers segment held the highest market share in 2021. Dry transformers are:

Eco-friendly

Safe

Highly energy-efficient

They also reduce transmission losses, making them ideal for smart grid and commercial applications.

?? 5. By Number of Phases

Single-phase

Three-phase

The three-phase transformers segment dominated the market in 2021 due to large-scale applications in industrial plants, utility grids, and renewable energy facilities.

?? 6. By Application

Utility

Industrial

Commercial

Residential

The utility segment held the largest share in 2021 and is expected to grow at a CAGR of 6.3%. Increasing power transmission activities, grid modernization projects, and growing electricity demand are driving segment growth.

?? Regional Analysis

The transformers market is studied across:

North America

Europe

Asia-Pacific

LAMEA

?? Asia-Pacific: Global Leader with Over 35% Share

Asia-Pacific dominated the transformers market in 2021 and will expand at a CAGR of 6.4%. Key growth drivers include:

Rapid industrialization

Smart grid investments

Expansion of renewable energy projects (especially solar)

Large population & rising electricity demand

?? LAMEA Region: Fastest Growth

The LAMEA region is projected to grow at the highest CAGR of 6.6%, driven by energy transition initiatives, infrastructure development, and expanding manufacturing sectors.

?? Key Market Players

Major companies operating in the transformers market include:

ABB Ltd.

Siemens AG

General Electric

Eaton

Toshiba Corporation

Schneider Electric

Mitsubishi Electric Corporation

CG Power & Industrial Solutions

VTC/GT

SGB SMIT

These companies are focusing on strategic partnerships, new product launches, digital monitoring solutions, and technological innovations to strengthen market share.

?? Conclusion

The transformers market is poised for strong growth driven by rising electricity demand, expansion of smart grids, and rapid industrialization. With governments focusing on clean energy, electrification, and modern power infrastructure, transformers will remain essential components of global energy systems. Although challenges such as high voltage risks persist, technological advancements and increasing investments in utilities and renewable energy projects will continue to accelerate market growth through 2031.

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Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.

Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.

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