Automatic Transfer Switch Market Expected to Reach $1.8 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Automatic Transfer Switch Market," The automatic transfer switch market was valued at $0.7 billion in 2022, and is estimated to reach $1.8 billion by 2032, growing at a CAGR of 10.1% from 2023 to 2032.

An Automatic Transfer Switch (ATS) is an electrical device used to automatically switch the power supply between two sources in order to provide uninterrupted power to a load, such as a building, facility, or equipment. The two sources typically consist of a primary power source (often the utility power grid) and a backup power source (such as a generator or an alternate power feed).

The ATS monitors the voltage or frequency of both power sources and in the event of a power loss or significant deviation from the desired parameters it swiftly and automatically transfers the load from the primary source to the backup source. This seamless transition ensures a continuous supply of power to the connected load without any interruption.

Automatic transfer switches are commonly used in critical applications where even a brief power outage could have serious consequences, such as data centers, hospitals, telecommunications facilities, and emergency response centers. ATS enhance the reliability of power distribution systems and help maintain operational continuity during electrical disturbances or failures.Automatic transfer switches enable power supply between backup generators, providing convenience and assurance to industries. As demand for power increases, so do the usage of these devices.

However, outages, unpredictable weather conditions, and voltage fluctuations also contribute to their usage. The growth of the automatic transfer switch industry is driven by reforms toward sustainable energy sources and the European Union's renewable energy directive, which sets binding norms for 27% final energy consumption from sustainable sources by 2030.

The automatic transfer switch market growth is expected to be restrained by high costs and technical complexities, including components, manufacturing technologies, and integration of alternative technologies like energy storage systems and IoT sensors. Cybersecurity concerns and higher maintenance costs are also expected due to the vulnerability of ATS systems to hacking and the need for specialized expertise and replacement components.

The automatic transfer switch market scope is segmented on the basis of switching mechanism, transition mode, end use, and region. By switching mechanism, the market is bifurcated into contactor and circuit. On the basis of transition mode, it is segregated into soft load, closed, delayed, and open. Depending on end use, it is separated into residential, commercial, and industrial.

Based on the switching mechanism, the contactor segment held the highest market share in 2022, accounting for more than half of the global automatic transfer switch market revenue. The rapid expansion of industrial sectors, which includes manufacturing plants, creates a substantial demand for ATS for normal operation of the high voltage process.

Based on transition mode, the closed segment held the highest market share in 2022, accounting for more than one-third of the global market revenue, and is estimated to maintain its leadership status throughout the automatic transfer switch market forecast period. Closed transition transfer within 5 electrical degrees is achieved passively, without control of the engine generator set. Therefore, no additional control wire runs are required between the ATS and engine generator set governor.

Based on the end-use, the residential held the highest market share in 2022, accounting for nearly half of the global automatic transfer switch market revenue, and are estimated to maintain their leadership status throughout the forecast period. This is mainly due to the increase in the utilization of consumer electronics goods for various comfort which led to the demand for the smooth operation of power flow and control.

Region-wise, the automatic transfer switch market trends are analyzed across North America (U.S., Canada, and Mexico), Europe (Germany, UK, France, Italy, and Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, and Rest of Asia-Pacific), and LAMEA (Latin America, the Middle East, and Africa).

Based on region, Asia-Pacific held the highest market share in terms of revenue in 2022, accounting for nearly two-fifths of the global automatic transfer switch market revenue, and is likely to dominate the market during the forecast period. The Asia-Pacific region presents significant growth potential in the ATS industry. Emerging markets, such as India, China, and Southeast Asian countries, have witnessed rapid industrial growth which will lead to increased demand for ATS. The increase in investment toward renewable energy sources is a factor that is anticipated to offer automatic transfer switch market opportunities in Asia-Pacific during the forecast period.

Competitive analysis and profiles of the major automatic transfer switch market players, such as ABB Ltd., Cummins Inc., Eaton Corporation, Kohler, Generac Power Systems, General Electric, Schneider Electric, Siemens, Vertiv Group Corp, and Caterpillar are focusing their investment on technologically advanced, cost-effective, and more secure products and solutions for various applications.

Key Findings Of The Study:

• On the basis of switching mechanism, the contactor segment emerged as the global leader by acquiring more than half of the automatic transfer switch market size in 2022.
• On the basis of transition mode, the closed segment emerged as the largest market share in 2022, which accounts for more than one-third of the automatic transfer switch market share.
• On the basis of end-use, the residential segment emerged as the largest market share in 2022, which accounts for nearly half of the market share according to automatic transfer switch market analysis.
• On the basis of region, Asia-Pacific is the major consumer of automatic transfer switch among other regions. It accounted for nearly two-fifths of the global market share in 2022.