Solid State Transformer Market Trends

Growth Drivers

• Rising investment in smart grids - The International Energy Agency predicted that investment in grids needs to be doubled by 2030 from over USD 330 billion every year to USD 750 billion with over 75% of the spending assigned to the distribution grids to expand, strengthen, and digitalize.  Hence, governments across nations are investing and encouraging organizations to spend on smart grids.
  
  As a result, the development of smart grids is expected to rise in the world. Further, this rise of power systems and the transition to smart grids has boosted the need for innovative technologies. Owing to this, solid-state transformers have gained importance as a feasible alternative to traditional transformers. These solid-state transformers equipment uses power electronic converters, providing not only excellent performance in contrast to conventional transformers but also a range of additional services.

• Growing preference for renewable energy - The demand for renewable energy sources is achieving global recognition as the best substitute to reduce greenhouse gas emissions as compared to fossil fuel. It was evaluated by EIA that, electricity generation by renewable sources in 2021 was anticipated to expand by over 8% to grow to 8 300 TWh, the fastest year-on-year growth since the 1970s.
  
  This is why, the market revenue is also set to rise. This is because, the use of solid-state transformers is frequent in generating energy from wind, solar, and tidal.
• Surging smart city initiatives in developing countries - With more people demanding quality lives in cities smart city initiatives are gaining huge importance. As a result, the government has launched several programs to boost the development of smart cities.
  
  A major factor of a smart city is to supply reliable power, further encouraging the power sector to function efficiently to satisfy the power needs of the residents. As a result, transformers are an important element in stabilizing power supply. Hence, solid-state transformers also play an integral part in this trend.

Challenges

• High cost of implementation - Solid-state transformers make use of powerful power electronic components and simplified technology which further contributes to their larger cost in contrast to other traditional transformers. However, this high cost of installation hinders the market expansion for solid-state transformers. Moreover, it also requires extra equipment which additional boosts the price of solid state transformer. Hence, the solid state transformer market is expected to hinder.

• Lack of efficiency of solid-state transformers

• Limited awareness among end users regarding its use - A large number of organizations still make use of traditional transformers owing to the cost and complexity of utilizing SST. Therefore, the market growth for solid state transformer is foreseen to experience challenges.