Solar Transformer Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented By Voltage Rating (Central Voltage, Medium-voltage, Low-voltage), By Application (Grid-connected and Off-grid solar systems ), By Colling Type (Oil-Immersed & Air-Cooled), By Region, Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 2.76 Billion
CAGR (2026-2031)	4.82%
Fastest Growing Segment	Medium-voltage
Largest Market	Asia Pacific
Market Size (2031)	USD 3.66 Billion

Market Overview

The Global Solar Transformer Market will grow from USD 2.76 Billion in 2025 to USD 3.66 Billion by 2031 at a 4.82% CAGR. Global solar transformers are specialized electrical devices engineered to convert the direct current generated by photovoltaic arrays into alternating current suitable for integration into utility grids. These units are critical for maintaining voltage stability and managing the variable load profiles inherent in solar energy generation. The market is primarily propelled by the accelerating global shift toward renewable energy sources, driven by rigorous government mandates for carbon neutrality and the decommissioning of fossil fuel infrastructure. Additionally, the urgent necessity for grid modernization to accommodate distributed energy resources significantly supports the demand for these essential components.

However, the sector faces a substantial impediment due to supply chain volatility and extended lead times for critical raw materials, such as electrical steel, which can severely delay project completion. This logistical bottleneck is exacerbated by the overwhelming volume of new installations required to meet international energy targets. According to SolarPower Europe, in 2024, the global solar industry installed a record 597 gigawatts of new capacity, representing a 33% increase over the previous year. This exponential growth places immense pressure on manufacturers to scale production rapidly while navigating complex global supply networks.

Key Market Drivers

Increasing investments in utility-scale solar power projects serve as a foundational driver for the solar transformer market. As financial capital shifts decisively toward renewable generation, the requirement for specialized step-up transformers to interface photovoltaic plants with high-voltage transmission lines rises proportionally. This investment trend ensures a robust pipeline of greenfield projects that necessitate immediate hardware procurement to facilitate grid connection. According to the International Energy Agency (IEA), June 2024, in the 'World Energy Investment 2024' report, global investment in solar PV is projected to grow to USD 500 billion in 2024, surpassing the combined spending on all other generation technologies. Such massive allocation of funds guarantees sustained demand for electrical equipment capable of managing solar energy output.

Simultaneously, the modernization of aging power transmission and distribution infrastructure compels utilities to adopt advanced transformer technologies. Legacy grids often lack the capacity to handle the bidirectional power flows and voltage fluctuations introduced by distributed solar assets, necessitating significant equipment upgrades. This modernization effort is critical for ensuring grid stability while integrating new renewable capacity. According to Hitachi Energy, May 2024, in the 'Hitachi Energy announces over $1.5 billion investment to ramp up global transformer production' press release, the company committed over USD 1.5 billion to expand manufacturing capabilities to meet this intensifying electrification demand. The scale of deployment requiring this infrastructure is evident in major markets. According to the Solar Energy Industries Association (SEIA), in 2024, the United States solar market installed 11.8 gigawatts of capacity in the first quarter alone, highlighting the urgent need for grid-ready components.

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Key Market Challenges

Supply chain volatility regarding critical raw materials constitutes a significant restraint for the Global Solar Transformer Market. The manufacturing process relies heavily on specific inputs such as grain-oriented electrical steel, which faces recurring shortages and price instability. When these materials are unavailable, manufacturers encounter difficulties in meeting production schedules, resulting in extended lead times for finished units. This inability to procure essential equipment on time delays the commissioning of utility-scale solar projects, causing financial uncertainty for developers and slowing the pace of grid integration.

The magnitude of this infrastructure bottleneck directly impedes market expansion by creating a disparity between solar panel installation and actual grid connectivity. Without the necessary transformers to manage voltage and load, generation capacity remains unutilized. According to the International Energy Agency, in 2024, approximately 3,000 gigawatts of renewable energy projects were waiting in grid connection queues globally, a backlog exacerbated by the limited availability of critical grid assets. This delay in project finalization restricts revenue recognition for market participants and dampens investor confidence in the sector's short-term growth potential.

Key Market Trends

The market shift toward 1500V DC solar systems is accelerating as developers seek to minimize resistive losses and lower Balance of System costs for large-scale projects. Operating at higher voltages allows for longer string lengths and fewer combiner boxes, significantly improving overall plant efficiency while reducing capital expenditures. This technical evolution is intrinsically linked to the rapid expansion of utility-scale deployments where maximizing output per footprint is critical for financial viability. According to the Solar Energy Industries Association (SEIA), March 2025, in the 'Solar Market Insight Report 2024 Year in Review', the U.S. utility-scale segment installed a record-breaking 41.4 gigawatts of direct current capacity in 2024, highlighting the massive scale of infrastructure now demanding these high-voltage components.

Simultaneously, the widespread adoption of smart transformers equipped with IoT and real-time monitoring is gaining momentum to address the complexities of distributing variable renewable energy. These advanced units enable operators to perform condition-based maintenance and manage bidirectional power flows, thereby enhancing grid stability and extending asset lifespans. The intensifying focus on grid digitalization to support decentralized generation is fueling significant financial growth for major technology providers. According to Siemens Energy, November 2025, in the 'Earnings Release Q4 FY 2025', the company reported that annual revenue rose by 15.2% on a comparable basis, led by an extraordinary increase in its Grid Technologies business area which delivers these essential digital solutions.

Segmental Insights

The Medium-voltage segment is recognized as the fastest-growing category in the global solar transformer market, primarily driven by the rapid expansion of utility-scale solar farms. As developers construct larger photovoltaic projects, there is a critical need to step up low-voltage power for efficient distribution across internal collection grids. Furthermore, distribution network operators increasingly require medium-voltage connections to ensure grid stability while integrating these renewable energy sources. This structural shift toward high-capacity solar installations directly fuels the demand for medium-voltage infrastructure to support seamless connectivity with national power systems.

Regional Insights

Asia Pacific maintains a leading position in the global solar transformer market due to aggressive renewable energy targets adopted by major economies such as China and India. The region experiences high demand for electricity driven by rapid industrialization, which accelerates the deployment of large-scale photovoltaic installations. Governments actively support this transition through favorable policies and grid modernization initiatives designed to integrate renewable sources effectively. Consequently, the need for transformers to manage voltage regulation and grid stability remains high, further supported by a robust local manufacturing ecosystem that strengthens the regional supply chain.

Recent Developments

• In February 2025, Eaton announced a $340 million investment to increase the manufacturing of three-phase transformers at a new facility in the United States. The project involved converting an existing site in South Carolina into a state-of-the-art plant to produce solutions for utility, commercial, and industrial applications. This expansion was a direct response to the historic demand for electrical infrastructure needed to support the energy transition and grid modernization. The increased production capacity was intended to facilitate the deployment of renewable energy resources, including solar power, by providing essential grid-connection equipment.
• In February 2025, Schneider Electric Infrastructure approved a plan to expand its transformer manufacturing capacity in India to meet the growing market demand from the power and renewable energy sectors. The company’s Board of Directors authorized the enhancement of its medium power transformer facility in Vadodara to increase annual production capacity significantly. This decision followed a strong performance in the region, which included securing key orders such as inverter-duty transformers specifically designed for a 150 MW solar power project. The expansion aimed to support the country's rapid adoption of sustainable energy solutions.
• In April 2024, Hitachi Energy revealed a significant investment of over $1.5 billion to ramp up its global transformer manufacturing capacity. This initiative was launched to meet the accelerating demand for transformers driven by the clean energy transition, including the integration of large-scale solar and wind generation. The investment included the expansion of facilities in Europe, the Americas, and Asia, aiming to support the electrification of energy systems worldwide. By enhancing its production capabilities, the company sought to address supply chain constraints and ensure the reliable delivery of critical grid components.
• In February 2024, Siemens Energy announced plans to establish its first transformer production facility in the United States to address the critical shortage of power transformers affecting renewable energy projects. The company committed to investing $150 million to expand its existing operations in Charlotte, North Carolina, transforming it into a manufacturing hub for large power transformers. This strategic move was designed to reduce lead times and support the country's goal of decarbonizing the grid by 2030. The facility would produce infrastructure essential for integrating solar and wind power into the national electrical network.

Key Market Players

• ABB Ltd.
• Siemens AG
• Schneider Electric SE
• General Electric Company
• Eaton Corporation plc
• Hitachi Energy
• Bharat Heavy Electricals Limited
• TBEA Co., Ltd.
• Hyosung Corporation
• Fuji Electric Co., Ltd.

By Voltage Rating	By Application	By Colling Type	By Region
Central Voltage Medium-voltage Low-voltage	Grid-connected and Off-grid solar systems	Oil-Immersed & Air-Cooled	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Solar Transformer Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Solar Transformer Market, By Voltage Rating:

• Central Voltage
• Medium-voltage
• Low-voltage

• Solar Transformer Market, By Application:

• Grid-connected and Off-grid solar systems

• Solar Transformer Market, By Colling Type:

• Oil-Immersed & Air-Cooled

• Solar Transformer Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE