Global Transfer Switch Market Ascends at a Healthy CAGR of 6.6%

Introduction

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.

Market Dynamics

Rapid Replacement of Conventional Generating Technologies with Sustainable Energy Sources to Drive the Global Transfer Switch Market

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.

Escalating Adoption of Micro-Grids to Provide Opportunities for the Global Transfer Switch Market

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.

Regional Insights

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.

Key Highlights

• The global transfer switch market was worth USD 1610 million in 2021. It is estimated to reach a predicted value of USD 2905 million by 2030, registering a CAGR of 6.6% during the forecast period (2022-2030).
• Based on type, the global transfer switch market is segmented into automatic and manual. The automatic segment accounted for the highest market share and is estimated to grow at a CAGR of 6.9% during the forecast period.
• Based on application, the global transfer switch market is segmented into industrial, commercial, and residential. The residential segment accounted for the highest market share and is estimated to grow at a CAGR of 6.8% during the forecast period.
• Based on transition mode, the global transfer switch market is segmented into the open, closed, delayed, and soft load transition. Closed segments hold the highest market share and are expected to witness the highest growth at a CAGR of 6.8% during the forecast period.
• Based on ampere rating, the global transfer switch market is segmented into 0-300A, 301-800A, 801-1600A, and 1601A-4000A. The 301A-800A segments hold the highest market share and are expected to witness the highest growth at a CAGR of 6.9% during the forecast period.

Competitive Players

1. ABB Ltd.
2. Schneider Electric
3. Siemens AG
4. Generac Power Systems
5. Eaton Corporation PLC
6. Emerson electric company
7. Cummins Inc.
8. General Electric.
9. DynaGen Technologies Inc.
10. Vertiv Holdings Co.
11. Briggs & Stratton Corporation
12. Caterpillar Inc.
13. Kohler Co.

Recent Developments

• August 2022 - ABB announced the acquisition of Siemens's low voltage NEMA motor business to enhance its product offering, expand its supply chain relationships, and improve support to its North American customer base.
• March 2022 - Russelectric, a Siemens Business, provides its Paralleling System, which is ideal for ensuring that essential loads are not disrupted when switching between all power source assets in airports. Peak shaving and utility-sponsored load curtailment initiatives are also possible with the System. The Paralleling System also provides critical airports with high resiliency, power continuity, and security.
• May 2022 - Generac Power Systems introduced two new Powermate dual-fuel capable portable generators: the Powermate 4500-Watt Dual Fuel Portable Generator and the Powermate 7500-Watt Dual Fuel Portable Generator.
• August 2022 - General Electric announced a partnership with Sulzer EMS to Deliver 20% higher power capacity with synchronous motor.
• August 2022 - General Electric announced an alliance with EY to help organizations improve productivity through data-driven manufacturing.

Market Share By Top Players

The transfer switch market is led by key players, including DynaGen Technologies, Inc., Vertiv Holdings Co., Briggs & Stratton Corporation, Caterpillar Inc., Eaton Corporation plc, Cummins, Generac Power Systems, General Electric, Kohler Co., and Schneider Electric SE. These industry leaders are playing an important role in advancing the sector with their cutting-edge transfer switch solutions. DynaGen Technologies, Inc. stands out for its technological innovation, while Vertiv Holdings Co. specializes in critical infrastructure technologies, emphasizing system resilience and uptime. 

Briggs & Stratton Corporation, a renowned name in power generation, focuses on durable and high-performance transfer switch solutions. Caterpillar Inc., Eaton Corporation plc, Cummins, Generac Power Systems, General Electric, Kohler Co., and Schneider Electric SE contribute their extensive expertise in power management to develop efficient transfer switches catering to diverse sectors. As the global demand for reliable power distribution systems escalates, these key players are expected to drive market growth, fostering competition and continuous innovation.

Segmentation

1. By Type
   1. Automatic
   2. Manual
2. By Application
   1. Industrial
   2. Commercial
   3. Residential
3. By Transition Mode
   1. Open
   2. Closed
   3. Delayed,
   4. Soft Load Transition
4. By Ampere Rating
   1. 0-300A
   2. 301-800A
   3. 801-1600A
   4. 1601A-4000A