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The automatic transfer switches (ATS) market size is estimated to increase by USD 286.02 million, growing at a CAGR of 7.17% between 2022 and 2027.
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 market plays a critical role in ensuring uninterrupted power supply during power outage scenarios. Its primary function involves seamlessly transitioning power sources between utility power and backup power source like battery systems. With the integration of Internet of Things (IoT) technology, modern ATS units can monitor electrical currents and voltages, ensuring optimal performance and safety. These switches are crucial components in commercial buildings, hospitals, and other infrastructure, minimizing operational downtime and ensuring cost-effectiveness through efficient power management. Featuring contactors and wiring setups, ATS units offer affordable electrical equipment for infrastructure development and operational continuity.
The market is further segmented into Type and End-User categories, providing a comprehensive overview of the diverse offerings and sub-segment available within the industry.
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.
The open transition segment was valued at USD 196.21 million in 2017. 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 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.
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 vital for commercial establishments and critical infrastructure, ensuring uninterrupted power supply during grid outages and voltage fluctuations. These switches swiftly transition power sources, delayed transition variations utilizing battery systems and backup sources to minimize downtime to milliseconds. With smart technologies and IoT integration, modern ATS units offer enhanced reliability and efficiency. They find extensive use in healthcare facilities, emergency response centers, and residential complexes, providing cost-effective backup power solutions. Featuring solid-state devices and mechanical switches, ATS units ensure seamless power restoration and operational continuity in the face of extreme weather events and power grid instability. 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.
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 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.
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.
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.
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.
Market Customer Landscape
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.
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 market forecast 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.
The market witnesses robust growth driven by rising concerns over energy security and the need for reliable backup power systems in the face of natural disasters and high demand situations. Infrastructure limitations and increasing adoption of renewable energy sources like solar panels and battery storage drive demand for ATS units to ensure grid stability and efficient load management. With the integration of smart grid technologies and distributed energy resources, ATS units play a crucial role in managing electricity demand and optimizing energy utilization. These switches ensure seamless connection and disconnection of power sources to various connected equipment in homes, businesses, factories, and on-site power plants, mitigating risks associated with in-rush current and grid fluctuations.
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 and trends, market forecasting, 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. |
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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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