Transfer switches provide a reliable way to transfer essential load connections between primary and alternate electrical power sources. A growing number of companies will likely seek to allocate the cost associated with increased safety regulations and the shift in the preference for more energy-efficient systems. Coronavirus has been affecting the economy, and consumers by its spread among people, causing temporary shutdowns in significant centers for electronics production. The component market has been disrupted by the lack of certain raw materials, increasing due to a shortage. Transfer switches are commonly found in homes and businesses to enable safe switching between various power sources so that a person is not left in the dark during an electrical outage.
The market for generating technologies is rapidly evolving as renewable energy sources such as solar, wind, and hydro continue to expand rapidly. The increasing demand for these energy sources has resulted in the development of new methods that facilitate converting conventional generating technologies efficiently to renewable ones. Population growth and industrialization have contributed to the increase in greenhouse gas emissions. Greenhouse gases, primarily carbon dioxide, significantly influence global warming and climate change. They also contribute to deforestation because their interference with photosynthesis limits plant growth.
Consequently, less oxygen is released into the atmosphere, lowering its concentration and altering the planet's climate. This trend is alarming because human activities and industry are the primary emitters of greenhouse gases. To combat this trend, renewable energy sources are becoming increasingly popular. This transition to renewable energy will significantly affect the power grid, necessitating interoperability between conventional and renewable energy generators.
Microgrids are small electric grids that can be used off-grid or as a supplement to the primary grid of a home or business. Typically, these are powered by renewable energy sources such as solar, wind, and hydropower. Microgrids are a more sustainable and cost-effective option for densely populated regions. According to the World Bank, approximately 1.2 billion individuals will need access to electricity by 2030 to achieve universal access. This can only be achieved through a combination of main grid extension, mini-grids, and off-grid solar. The requirement for a connection to the primary grid has been one of the most significant obstacles to microgrid deployment. In recent years, however, the demand for microgrids has increased. A "break button" that would disconnect the grid when necessary is a solution to this issue. Consequently, there are more opportunities for transfer switches, which allow a microgrid to connect and disconnect from the grid.
By region, the global transfer switch market is segmented into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa. North America accounted for the largest market share and is estimated to grow at a CAGR of 6.4% during the forecast period. North America holds the largest market share for transfer switches worldwide. In North America, the demand for transfer switches is driven by the growing need to renovate electric grid networks. Switching power from one circuit to another or between two circuits is becoming necessary. As a result of the deteriorating infrastructure in North America and the awareness of these issues, the demand for transfer switches has been increasing steadily. In addition, the modern electrical distribution grid employs cutting-edge switching technologies such as power electronic devices, microprocessors, and electronic control systems. These switches can transfer electricity between substations quickly and reliably. Installation of transfer switches is crucial for maintaining a dependable power distribution system.
Europe is the second largest region. It is estimated to reach an expected USD 830 million by 2030, registering a CAGR of 6.7% during the forecast period. In Europe, the installation of transfer switches for residential and industrial buildings is rising. Numerous nations, including the United Kingdom, Germany, Russia, and others, are investing in microgrid infrastructure to increase the output of renewable energy sources. Microgrid networks are sweeping Europe as a replacement for the outdated and inefficient electrical grid. Transfer switches are in high demand due to the rapid expansion of microgrids. These switches create a robust connection between multiple electricity sources, which is necessary to prevent blackouts and interruptions. In 2016, the European Union revised its directive on renewable energy. To the directive, by 2030, 27% of the region's final energy consumption will come from renewable sources. This includes energy derived from geothermal, solar, and wind sources. The demand for transfer switches in the region is anticipated to increase substantially to keep up with the need for renewable energy and microgrids.
The Asia Pacific is the third largest region. During the forecast period, the Asia-Pacific region is anticipated to experience the highest growth in the transfer switch market. In Asia-Pacific, the introduction of large-scale renewable integration reform has increased demand for transfer switches, as countries such as China and India recognize the importance of a stable power supply to their economies. The International Renewable Energy Agency (IRENA) and China State Grid Corporation (SGCC) have signed a new Memorandum of Understanding (MoU) to improve China's grid, system flexibility, and sector coupling. The Clean Energy Corridor is also a part of the MOU. According to the terms of the agreement, IRENA and SGCC have been collaborating on research projects that aim to increase the adaptability of power grids, accelerate the development of solar power grids, and reduce carbon emissions in urban energy systems.
In addition, the growing demand for electricity in developing nations drives the need for transfer switches in the region. Due to rapidly rising energy demands and a power shortage, the region is struggling to meet growing energy demands. Numerous major corporations have increased their infrastructure investments, including project finance, renewable energy, coal, and natural gas.
The prominent global transfer switch market players are ABB Ltd., Schneider Electric, Siemens AG, Generac Power Systems, Eaton Corporation PLC, Emerson electric company, Cummins Inc., and General Electric.