Automatic Transfer Switch Market size was USD 900 million in 2024 and is estimated to reach USD 3.53 billion by the end of 2037, expanding at a CAGR of 11.1% during the forecast period, i.e., 2025-2037. In 2025, the industry size of automatic transfer switches is assessed at USD 999.9 million.
The rapid industrial and urban activities across the world are augmenting the high demand for seamless energy systems including automatic transfer switches (ATS). For instance, the United Nations Industrial Development Organization (UNIDO) revealed that in 2023, the industrial sector held 21.3% of the global economy, while the manufacturing sector added a USD 15.5 trillion valuation. The same source also estimates that the industrial sector has major direct and indirect links with all sustainable development goals.
|
Region |
Value Addition of Manufacturing to the Industrial Sector |
|
Asia |
81.0% |
|
Europe |
80.8% |
|
North America |
77.5% |
|
Latin America and the Caribbean |
72.4% |
|
Sub-Saharan Africa |
55.7% |
Source: International Yearbook of Industrial Statistics 2024
Infrastructure development projects such as smart cities also highly employ automatic transfer switches for uninterrupted power supply. The analysis by the Organisation for Economic Co-operation and Development (OECD) estimates that the global smart city market is set to increase from USD 511.6 billion in 2022 to USD 1024.0 billion by 2027. Furthermore, the increasing growth in the adoption of renewable energy systems is fueling the sales of ATS technologies as they offer effective integration between grid power and backup generation.
Eaton Corporation one the leading producer of automatic transfer switches totaled revenue worth USD 23.2 billion in 2023. This revenue growth is entirely driven by organic sales and recorded a 12% hike from the previous year. Furthermore, sustainable solutions amounted to 71% of the total sales. In 2023, Electrical Americas and Electrical Global accounted for 25% of net sales made to 7 large end users.
Growth Drivers
Challenges
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
11.1% |
|
Base Year Market Size (2024) |
USD 900 million |
|
Forecast Year Market Size (2037) |
USD 3.53 billion |
|
Regional Scope |
|
Switching Mechanism (Contactor, Circuit)
The contactor segment in automatic transfer switch market is foreseen to capture a dominating share throughout the forecast period. The efficient, safe, and reliable switching between power sources is augmenting the sales of contactors. The rising automation trend is pushing the demand for ATS with modern contactors. The commercial and industrial sectors are prime end users of ATS contactors as they are highly dependent on continuous and seamless power connections. Manufacturers are earning high profits from this segment by introducing innovative contactors. For instance, in September 2024, the Schaltbau Group announced the expansion of its high-power contactor portfolio at InnoTrans 24. The CP Series of high-power traction contactors with robust design offers optimal performance under heavy load conditions.
End use (Residential, Commercial, Industrial)
In automatic transfer switch market, residential segment is poised to capture over 37% revenue share by 2037. The smart home trend is augmenting the use of backup generators, which is directly increasing the demand for automatic transfer switches. According to Research Nester's study, the global smart home market was evaluated at USD 155 billion in 2023. Furthermore, the hybrid and remote working trends are increasing the need for continuous power supply, which is directly fueling the sales of generators and automatic transfer switches. As per the survey conducted between April to June 2024 by the Office for National Statistics, around 29% of the U.K. individuals above 30 years of age were following hybrid working models.
Our in-depth analysis of the global automatic transfer switch market includes the following segments:
|
Switching Mechanism |
|
|
Transition Mode |
|
|
End use |
|
North America Market Forecast
North America automatic transfer switch market is expected to dominate revenue share of over 46.8% by 2037. The strong presence of data centers & telecom industry, high energy demand, automation trends, and the existence of key players are fueling the sales of automatic transfer switches. The high adoption of smart home ecosystems is directly augmenting the demand for automatic transfer switches, both in the U.S. and Canada.
In the U.S., the rapidly expanding data center facilities are fueling the sales of automatic transfer switches. The growth in new network infrastructure programs is generating lucrative opportunities for automatic transfer switch market. The U.S. Department of Agency estimates that the data centers account for 2.0% of total energy consumption. The same source also reveals that with the rise in information technology use, the data center and server energy is anticipated to grow.
In Canada, the rising adoption of renewable energy sources such as solar, wind, and hydroelectricity is augmenting the demand for automatic transfer switches. The efficiency of these technologies in switching between grid and renewable power sources is uplifting their sales growth. For instance, the Canadian Centre for Energy Information reveals that around 70% of power is sourced from renewable solutions. The country’s 62% of electricity is sourced from hydroelectric technologies.
Asia Pacific Market Statistics
The Asia Pacific automatic transfer switch market is projected to expand at the fastest CAGR throughout the study period. Rapid industrialization, expansion of advanced wireless communication networks, and high adoption of connected technologies in both residential and industrial sectors are pushing the demand for automatic transfer switches. The rise in urban and industrial activities is the prime factor contributing to the sales of automatic transfer switches in China and India. The infrastructure development and upgrade projects are boosting the profits of automatic transfer switch market in Japan and South Korea.
In China, the swift expansion of industrial activities is directly influencing the sales of automatic transfer switches. For instance, in November 2024, the State Council of China revealed that the country’s industrial output expanded by 5.3% YoY in Q4 FY24. The increasing adoption of high-tech manufacturing technologies is driving high energy demand, leading to the growing adoption of automatic transfer switches.
In India, the rising expansion of IT and telecom companies is driving high electricity demand, which is further fueling the sales of generators and automatic transfer switches. The India Brand Equity Foundation (IBEF) report reveals that in the Union Budget 2024-2025 around USD 13.98 billion was allocated for the IT & telecom sector. The country is the 2nd largest market for telecommunications. In the second quarter of FY 24, the wireless subscriber base reached 1,168.95 million.
Leading companies in the automatic transfer switch market are employing various organic and inorganic tactics to uplift their position in the global landscape. New product launches, investments in research and development activities, strategic collaborations & partnerships, mergers & acquisitions, and global expansion are some of the tactics boosting the revenue shares of key market players. Eaton Corporation calculated revenues worth USD 23.3 billion all organically in 2023. Organic marketing is playing a vital role in the enhancement of a company’s position in the global landscape.
Some of the key players in automatic transfer switch market:
Author Credits: Dhruv Bhatia
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