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The automatic transfer switches market size is estimated to increase by USD 285.2 million, growing at a CAGR of 6.78% between 2023 and 2028. The growing popularity of microgrid networks significantly drives the market. Microgrids, smaller than traditional electricity grids, operate similarly by generating, distributing, and regulating electricity flow to users. The increasing energy demand, rising population, and aging infrastructure have intensified the strain on conventional grids, leading to frequent outages in many countries. These outages not only impact end-users but also diminish the profitability of the utility sector and widen the gap between demand and supply. As a response, the adoption of ATS systems becomes imperative to ensure seamless transfer and continuity of service during grid disturbances. This trend underscores the importance of investing in resilient and adaptable energy infrastructure, where ATS solutions play a crucial role in enhancing grid reliability and meeting the evolving needs of modern electricity consumers.
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The open transition segment will account for a major share of the market during the forecast period. Open transition transfer switches play a crucial role in providing backup energy during utility outages or failures that will surge. The demand for open transition type will surge, which in turn will boost the global market during the forecast period.
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The open transition segment was valued at USD 206.60 million in 2018. Open transition switches are electrical devices that are commonly used in control systems to provide a seamless transfer of electrical loads from one power source to another during energy outages or other abnormal conditions. With the growing dependence on technology in various industries, organizations and individuals require a continuous energy supply to ensure uninterrupted operations, data protection, and system reliability. Such factors will increase segment during the forecast period.
Based on end-user, the market has been segmented into industrial, commercial, and residential. The industrial segment will account for the largest share of this segment. In the industrial segment, most processes require electricity, while some machines, such as HVAC and pumps, must operate round-the-clock. In such cases, an outage can affect the supply and bring the entire manufacturing and operational process to a halt, thus not only affecting the output but also leading to higher overall operational costs. Thereby, automatic transfer switches aid in achieving uninterrupted supply by responding quickly and switching from utility feeds to backup generators and then back to utility feeds when the power supply is restored, thus ensuring maximum availability during manufacturing or process operations. Such factors will increase the segment growth during the forecast period.
APAC is estimated to contribute 35% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.
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The increasing investments in smart cities and growth in data centers in the region also provide enormous scope for the vendors. By 2030, urban areas are expected to house 40% of India's population and contribute 75% to the GDP. Smart cities must have electricity backup using smart city sensor grids and smart city platforms to provide good power connectivity. Thus, the increasing construction of residential structures and growth in smart grid infrastructure due to urbanization, coupled with the growing population, are expected to drive the demand for backup, which in turn, will drive the growth of the market in APAC during the forecast period.
The market is witnessing significant growth due to the increasing demand for uninterrupted power supply in commercial establishments. Power supply disruptions, grid outages, and voltage fluctuations are common issues that can cause downtime and negatively impact businesses. ATS plays a crucial role in ensuring the seamless transfer of power from the utility power to the backup power source during power outages or voltage fluctuations. The industrialization and urbanization trends, particularly in developing economies, are driving the demand for ATS in manufacturing facilities, data centers, and critical infrastructure. The increasing number of infrastructure projects, including healthcare facilities and essential infrastructure, is also fueling the market growth. However, the market is facing challenges due to supply chain disruptions caused by lockdowns, travel restrictions, and workforce limitations.
Further, economic uncertainties and budget constraints are also impacting the installation of new ATS systems. The market is expected to grow despite these challenges due to the critical nature of ATS in ensuring the continuity of operations for businesses and essential services. The market is competitive, with key players including Generac Power Systems, Eaton Corporation, Schneider Electric, and Siemens AG. The market is witnessing innovation in battery systems and generator technology to provide more efficient and cost-effective backup power solutions. The market is expected to grow at a steady pace in the coming years, driven by the increasing demand for uninterrupted power supply and the need for critical infrastructure to ensure business continuity.
The continuous growth of uninterrupted power applications is one of the key drivers supporting market growth. The increasing demand for energy, rising population, and aging power infrastructure have increased the strain on power grids, which is a major cause of outages in most countries. Outages not only affect end-users but also curb the profitability of the utility sector and increase the disparities between power demand and supply.
Moreover, the increasing instances of power outages have led to the higher adoption of backup power generators in the industrial, commercial, and residential sectors. During outages from the main power grids, automatic transfer switches are used to automatically transfer the power from the utility feed to the onsite backup generator. Thus, unexpected power outages and brownouts have increased the demand for reliable and efficient backup power sources such as generators and UPS systems, which will have a positive impact on the market growth and trends during the forecast period.
The growing popularity of microgrid networks is one of the key trends contributing to the market. A microgrid is a power grid that is smaller than the conventional electricity grid. Similar to a traditional grid, a microgrid produces, distributes, and controls the flow of electricity to consumers. Microgrids are used during power outages in the central grid system as they can operate independently by isolating their generation loads with the help of automatic transfer switches.
Moreover, the deployment of microgrid projects has been increasing owing to the inability of the conventional grid to cater to the rising demand for electricity. Commercial and residential units in rural areas have also increased, thus putting extra pressure on the utility. Therefore, to cater to all the energy needs in remote locations in many countries, the government provides incentives to promote renewable power generation and microgrids. This, in turn, will propel the market during the forecast period.
The impact of regulatory standards on ATS design is one of the factors hampering the market. The market is regulated by various international and regional electrical commissions, and all ATS products that enter the market are subjected to stringent regulations. As the technical and manufacturing standards vary from country to country, it spells additional costs for the manufacturers in designing different architecture based on the country's requirements. Every automatic transfer switch must have a short circuit withstand and close-on rating (WCR) as prescribed in the UL 1008.
Further, the WCR varies according to the application voltage, switch frame size, bypass or non-bypass, number of poles, and overcurrent protection of transfer switches. Therefore, the automatic transfer switch needs to be selected appropriately based on the WCR prescribed in UL 1008. Although manufacturers are trying to provide technical and design assistance, specifying time-based WCR before evaluating fault current will not only increase the size of the automatic transfer switch but also result in a more expensive product than necessary. This factor will impede the market during the forecast period.
The market research report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ABB Ltd.: The company offers automatic transfer switches such as TruONE ATS, Zenith T-series, GTX Series.
Briggs and Stratton LLC: The company offers automatic transfer switches such as 200 Amps switch.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD million" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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The market is pivotal in ensuring seamless electrical device operation during critical loads and extreme weather events. ATS systems automatically switch between primary power sources and backup battery systems, crucial for maintaining digital connectivity in residential properties and supporting remote work and learning. They integrate smart technologies and Internet of Things capabilities to monitor electrical currents, voltages, and mechanical switches, including solid-state devices like Open Transition ATS units. In-rush current management and cost-effectiveness drive their adoption in critical operations power systems, enhancing energy security amidst power grid instability and natural disasters. ATS units optimize load management through smart grid technologies and distributed energy resources, leveraging solar panels and battery storage for renewable energy utilization. As population growth increases electricity demand, ATS solutions play a crucial role in ensuring grid stability and meeting evolving energy needs efficiently.
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Market Scope |
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Report Coverage |
Details |
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Page number |
183 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.78% |
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Market growth 2024-2028 |
USD 285.2 million |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
6.24 |
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Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 35% |
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Key countries |
US, China, Japan, UK, and India |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
ABB Ltd., alfanar Group, Briggs and Stratton LLC, Camsco Electric Co. Ltd., Caterpillar Inc., Cummins Inc., Delta Electronics Inc., Eaton Corp. Plc, Generac Holdings Inc., Gulf Electrical Distribution Apparatuses Co. Ltd., Kohler Co., Kusum Engineering Works, Maxge Electrical Technology Co. Ltd., Regal Rexnord Corp., Schneider Electric SE, Siemens AG, SM Controls, SOCOMEC Group, Vertiv Holdings Co., and Winfull Technology Co. Ltd. |
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Market dynamics |
Parent market growth analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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