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The automatic transfer switches (ATS) market size is estimated to grow at a CAGR of 7.17% between 2022 and 2027 and the size of the market is forecast to increase by USD 286.02 million. The growth of the market depends on several factors, such as the continuous growth of uninterrupted power applications, the upcoming and ongoing smart grid projects, and the increasing demand from data centers.
This report extensively covers market segmentation by type (open transition, closed transition, static transfer switch, and others), end-user (industrial, commercial, and residential), and geography (APAC, North America, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Our analysis of the adoption life cycle of the market indicates its movement between the innovator’s stage and the laggard’s stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2022 to 2027.
Global Automatic Transfer Switches Market Customer Landscape
Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a disruption in the growth of the market during the COVID-19 pandemic, a holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.
The continuous growth of uninterrupted power applications is one of the key drivers supporting the ATS 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 power outages in most countries. Power 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 power 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 automatic transfer switches market growth during the forecast period.
The growing popularity of microgrid networks is one of the key trends contributing to the ATS market growth. 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.
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 automatic transfer switches market growth during the forecast period.
The impact of regulatory standards on ATS design is one of the factors hampering the ATS market growth. 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.
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 automatic transfer switches market growth during the forecast period.
Vendors 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 vendors, including:
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The open transition segment will account for a major share of the market's growth during the forecast period. Open transition transfer switches play a crucial role in providing backup power during utility outages or failures that will surge. The demand for open transition type will surge, which in turn will boost the growth of the global automatic transfer switches market during the forecast period.
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The open transition segment was valued at USD 196.21 million in 2017 and continued to grow until 2021. Open transition automatic transfer switches are electrical devices that are commonly used in power systems to provide a seamless transfer of electrical loads from one power source to another during power outages or other abnormal conditions. With the growing dependence on technology in various industries, organizations and individuals require a continuous power supply to ensure uninterrupted operations, data protection, and system reliability. Such factors will increase segment growth 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 power 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 power 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 of power during manufacturing or process operations. Such factors will increase the segment growth during the forecast period.
APAC is estimated to contribute 37% to the growth by 2027. 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 of automatic transfer switches. 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 power 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 power, which in turn, will drive the growth of the automatic transfer switches market in APAC during the forecast period.
The outbreak of COVID-19 caused an economic recession in 2020 and massively disrupted industrial operations in the region due to the implementation of lockdown measures. However, economic activities were resumed in late 2020 due to a decline in the number of COVID-19 cases owing to vaccination drives initiated by governments. This has been increasing the commercial and industrial demand for electricity, which will positively impact the regional demand for power and, in turn, drive the growth of the regional market during the forecast period.
The automatic transfer switches market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Automatic Transfer Switches (ATS) Market Scope |
|
Report Coverage |
Details |
Page number |
174 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.17% |
Market growth 2023-2027 |
USD 286.02 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
6.27 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 37% |
Key countries |
US, China, Japan, India, and UK |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
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. |
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