United States Transformer Market Size and Forecast 2025–2033

The United States transformer market is entering a defining decade. As the nation modernizes an aging power grid, integrates renewable energy at unprecedented scale, and electrifies transportation and industry, transformers—often unseen yet absolutely essential—are moving to the center of the energy transition. According to Renub Research, the U.S. Transformer Market is anticipated to grow to US$ 33.25 billion by 2033 from US$ 19.95 billion in 2024, expanding at a CAGR of 5.84% during 2025–2033. Rising electricity demand, large-scale infrastructure upgrades, and continued investments in renewable energy and smart grids are shaping both the volume and the sophistication of transformer deployments across the country.

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United States Transformer Market Overview

A transformer is an electrical machine that transfers electrical energy between circuits through electromagnetic induction, stepping voltage up or down without altering frequency. This capability makes transformers indispensable for efficient power generation, long-distance transmission, distribution, and end-use across residential, commercial, industrial, and utility applications.

In the United States, transformers form the backbone of the national power system. From large power transformers at substations to compact distribution units in neighborhoods and commercial buildings, these devices ensure that electricity moves safely and reliably from power plants—conventional or renewable—to the point of consumption. As the grid evolves toward a smarter, more decentralized architecture, transformer technology is also advancing, incorporating digital monitoring, higher efficiency standards, and environmentally safer designs.

The coming decade will be defined by three parallel forces: the urgent need to replace aging assets, the rapid expansion of renewable energy, and the electrification of sectors historically powered by fossil fuels. Each of these trends directly increases demand for new, upgraded, and specialized transformer solutions.

Key Growth Drivers

1) Grid Modernization and Infrastructure Renewal

Much of America’s grid infrastructure is operating well beyond its intended lifespan. A significant share of installed transformers are over 25 years old, making failures more likely and maintenance increasingly expensive. Federal and state programs aimed at grid resilience, reliability, and cybersecurity are accelerating replacement cycles and the adoption of digitally enabled equipment.

Utilities are prioritizing transformers that support real-time monitoring, predictive maintenance, and automated controls—capabilities essential to modern smart grids. With long-distance transmission upgrades, substation refurbishments, and urban distribution overhauls underway nationwide, transformer replacement and expansion will remain a cornerstone of infrastructure investment throughout the forecast period.

2) Growth of Renewable Energy Integration

The rapid expansion of solar, wind, and other renewables is reshaping how electricity flows across the grid. Unlike traditional centralized generation, renewables are often distributed and variable, requiring transformers capable of handling bidirectional power flows and fluctuating voltage levels while maintaining grid stability.

Large utility-scale solar and wind farms require high-capacity power transformers for grid connection, while distributed generation—rooftop solar, community solar, and microgrids—drives demand for flexible distribution transformers. As the United States advances toward long-term decarbonization goals, renewable integration will continue to generate sustained demand for both conventional and advanced, eco-friendly transformer technologies.

3) Expansion of Electric Vehicle (EV) Infrastructure

The electrification of transportation is adding a new layer of demand to local and regional power networks. High-capacity charging hubs, fast-charging corridors, and widespread residential chargers require robust medium- and low-voltage distribution transformers to manage peak loads and ensure voltage stability.

Public and private investments in EV charging infrastructure—across highways, workplaces, apartment complexes, and retail centers—are creating a growing market for transformers designed to support high power density and continuous operation. Even policy uncertainty around funding mechanisms does not diminish the structural shift toward electric mobility, which will remain a long-term growth catalyst for the transformer market.

Market Challenges

Supply Chain Constraints and Raw Material Volatility

Transformer manufacturing depends heavily on inputs such as copper, electrical steel, and specialized components. Global supply chain disruptions, fluctuating commodity prices, and shipping bottlenecks have extended lead times and increased costs. Reliance on overseas suppliers for key materials also exposes the market to geopolitical and trade-related risks.

These constraints are particularly challenging for utilities facing tight project timelines under grid modernization mandates. Unless domestic manufacturing capacity and sourcing resilience improve, supply limitations could slow the pace of infrastructure upgrades.

Environmental and Regulatory Compliance

Transformers must comply with strict U.S. Department of Energy (DOE) efficiency standards and Environmental Protection Agency (EPA) regulations governing oil leakage, emissions, and overall environmental impact. While these standards are essential for sustainability, they also increase R&D and manufacturing costs.

The shift toward low-loss designs, biodegradable insulating fluids, and dry-type technologies is reshaping product portfolios. However, compliance costs can be especially burdensome for smaller manufacturers and price-sensitive projects, potentially affecting adoption rates in certain segments.

Segment Highlights

United States Air-Cooled (Dry-Type) Transformer Market

Air-cooled or dry-type transformers are gaining traction across the United States due to their safety, environmental advantages, and low maintenance requirements. Free from oil, they eliminate the risk of leaks and fire hazards, making them ideal for indoor applications such as hospitals, data centers, educational institutions, and commercial buildings.

As green building standards and energy efficiency regulations become more stringent, demand for dry-type transformers continues to rise. Their compact footprint and suitability for confined urban spaces further strengthen their appeal in modern infrastructure projects.

United States Power Transformer Market

Power transformers are critical for high-voltage transmission across long distances. As electricity consumption grows and renewable generation sites expand into remote areas, the need for high-capacity, high-efficiency power transformers is increasing.

Utilities are investing in advanced designs featuring improved insulation systems, enhanced cooling, and digital diagnostics to support smart grid operations. Replacement of aging assets and the commissioning of new transmission corridors will keep power transformers at the forefront of market growth.

United States Three-Phase Transformer Market

Three-phase transformers dominate industrial, commercial, and utility applications due to their ability to deliver large loads efficiently with lower losses than single-phase alternatives. Manufacturing plants, data centers, large commercial complexes, and infrastructure projects rely heavily on three-phase systems.

Rising industrial automation, the expansion of hyperscale data centers, and increasing urban construction are driving sustained demand. As power systems become more complex and decentralized, three-phase transformers remain essential for stable and efficient electricity distribution.

State-Level Market Dynamics

California Transformer Market

California leads the nation in clean energy adoption and electrification initiatives, making it a major growth engine for transformer demand. The state’s ambitious renewable targets, extensive EV infrastructure planning, and smart grid programs require advanced transformer technologies.

Wildfire mitigation strategies further emphasize resilient, high-efficiency equipment capable of maintaining reliability under extreme conditions. Dense urban centers, high energy consumption, and strict environmental regulations are accelerating the deployment of eco-friendly and high-performance transformers across utility, commercial, and residential segments.

New York Transformer Market

New York’s commitment to energy transition under the Climate Leadership and Community Protection Act (CLCPA), which targets a carbon-free electricity system by 2040, is reshaping its grid infrastructure. Massive investments in renewable energy, energy storage, and grid modernization are driving demand for both large-scale power transformers and compact, low-noise units suitable for dense urban environments.

Electrification of buildings, public transportation upgrades, and smart city initiatives in New York City and surrounding regions are further strengthening market momentum.

New Jersey Transformer Market

New Jersey’s transformer market is expanding alongside infrastructure development, renewable energy investments, and suburban growth. Offshore wind projects and solar installations require reliable transformer systems for grid integration, while rising EV adoption boosts demand for residential and commercial distribution transformers.

Utilities in the state are also prioritizing smart grid upgrades, replacing legacy equipment with digitally enabled systems to enhance resilience and operational efficiency.

Competitive Landscape and Recent Developments

The U.S. transformer market is highly competitive, characterized by multinational manufacturers, technology-driven innovation, and strategic capacity expansions.

Hitachi Energy announced in December 2022 a US$ 37 million investment to expand and upgrade its South Boston, Virginia power transformer facility, addressing growing demand from utilities, renewable projects, and data centers.

In April 2023, Hitachi Energy unveiled over US$ 1.5 billion in global investments to expand transformer production capacity by 2027, supporting electrification initiatives worldwide.

In November 2024, the company introduced a new series of transformers designed for floating offshore applications, optimizing wind energy generation in harsh environments.

Siemens and Tietoevry partnered in December 2024 to accelerate digital transformation in the Northern and Central U.S. utilities sector, leveraging Siemens’ Gridscale X software to enhance grid management amid the energy transition.

TenneT and Siemens Energy announced in July 2024 a collaboration to reduce CO₂ emissions in transformer manufacturing by using 100% recycled copper, targeting significant carbon reductions by 2030.

GE Vernova expanded its transformer manufacturing facilities in Stafford, UK, in September 2024 to support rising demand for HVDC transmission systems powering renewable energy projects across the U.S., Asia, and Europe.

These developments underscore a market focused not only on capacity growth but also on sustainability, digitalization, and advanced materials.

Market Segmentation

By Power Rating:

Large

Medium

Small

By Cooling Type:

Air-cooled

Oil-cooled

By Transformer Type:

Power Transformer

Distribution Transformer

By Phase:

Three Phase

Single Phase

Top States:

California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Georgia, Washington, New Jersey, and the Rest of the United States.

Key Players:

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 (BHEL), Schneider Electric SE.

Final Thoughts

Transformers may not capture public attention like electric vehicles or solar panels, but they are the silent enablers of America’s energy future. As the United States confronts the dual challenge of replacing aging infrastructure and building a cleaner, more resilient power system, transformer technology sits at the heart of the transition.

With the market projected by Renub Research to grow from US$ 19.95 billion in 2024 to US$ 33.25 billion by 2033, the next decade will be defined by modernization, renewable integration, and electrification. Manufacturers that invest in advanced materials, digital intelligence, and sustainable design will shape the industry’s trajectory. For utilities, policymakers, and investors, the message is clear: the path to a reliable, low-carbon grid runs through the transformer.

In an era of rapid change, the humble transformer is proving to be one of the most strategic assets in the nation’s energy transformation—quietly powering the systems that will define America’s economic and environmental future.