Automatic Transfer Switch Market to Reach $1.8 billion, Globally, by 2032 at 10.1% CAGR: Allied Market Research

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Oct 02, 2023, 10:01 ET

PORTLAND, Ore., Oct. 2, 2023 /PRNewswire/ -- "The automatic transfer switch (ATS) market is driven by the surge in the usage of automatic transfer switches in power and transmission industries, favorable government policies, and an increase in renewable energy integration reforms.

Allied Market Research published a report, titled, "Automatic Transfer Switch Market by Switching Mechanism (Contactor, Circuit), by Transition Mode (Soft Load, Closed, Delayed, Open), by End-Use (Residential, Commercial, Industrial): Global Opportunity Analysis and Industry Forecast, 2023-2032". According to the report. The automatic transfer switch market was valued for $0.7 billion in 2022 and is estimated to reach $1.8 billion by 2032, exhibiting a CAGR of 10.1% from 2023 to 2032.

Automatic Transfer Switch (ATS) systems, ensuring uninterrupted power during grid disruptions, are vital for operational efficiency and reduce energy waste. Growing reliance on electricity, driven by technology and digitalization, amplifies the need for reliable power transfer.

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Prime determinants of growth

The surge in the usage of automatic transfer switches in power and transmission industries, favorable government policies, and an increase in renewable energy integration reforms are some prime determinants that drive the growth of the global automatic transfer switch market. However, high cost, technical complexities, and cyber security concerns restrict market growth. Moreover, the adoption of ATS in the residential industry, and digital twin and advanced control algorithm technology present new opportunities in the coming years.

Report coverage & details:

Report Coverage	Details
Forecast Period	2023–2032
Base Year	2022
Market Size in 2022	$0.7 billion
Market Size in 2032	$1.8 billion
CAGR	10.1 %
No. of Pages in Report	265
Segments covered	Switching Mechanism, Transition Mode, End-Use, and Region.
Drivers	Surge in the usage of automatic transfer switches in power and transmission industries.
	Favorable government policies
	Increase in renewable energy integration reforms
Opportunities	High adoption of automatic transfer switches in the residential industry.
Opportunities	Digital twin technology and advanced control algorithms.
Restraints	High costs and technical complexities
Restraints	Cybersecurity concerns, maintenance, and service costs

Impact Scenario

Geopolitica instability from the Russia-Ukraine conflict encourages global prioritization of energy security.
Increased investments in backup power solutions, including ATS systems, occur to ensure uninterrupted power supply during potential disruptions.
Regulatory incentives are introduced in some regions, boosting demand for ATS systems as companies aim to enhance infrastructure resilience.
Economic uncertainty stemming from the conflict leads to cautious spending on non-essential infrastructure projects, potentially slowing ATS market growth.
Trade disruptions or sanctions related to the conflict disrupt ATS supply chains, thereby increasing manufacturing costs.
Impact on the ATS market varies by region based on individual country policies and broader economic and geopolitical dynamics. ATS manufacturers should monitor developments and diversify supply chains to mitigate potential disruptions.

The circuit type switching mechanism segment to maintain its leadership status during the forecast period

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. However, the circuit segment is projected to manifest a CAGR of 11.6% from 2023 to 2032, as this type of switching mechanism came into view due to an increase in the application of the Internet of Things in various residential applications.

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The closed segment to maintain its leadership status throughout the forecast period

Based on transition mode, the closed segment held the highest market share in 2022, accounting for more than one-third of the global automatic transfer switch market revenue, and is estimated to maintain its leadership status throughout the 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. However, the open segment is projected to manifest a CAGR of 13.2% from 2023 to 2032. In open transition, the load is disconnected from one source, before being connected to the alternate source. Most transfer switches will accomplish the transfer sequence very quickly, yet a brief power interruption is noticeable to the building occupants and is most certainly noticed by sensitive electronic equipment.

The residential segment to maintain its leadership status throughout the forecast period

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. However, the commercial segment end-use is projected to manifest a CAGR of 11.7% from 2023 to 2032, owing to the increase in the construction of commercial buildings and other corporate buildings where ATS is required.

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Asia-Pacific to maintain its dominance by 2032

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. Furthermore, the Asia-Pacific region is expected to witness the fastest CAGR of 10.8% from 2023 to 2032. 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 new growth opportunities for ATS in Asia-Pacific during the forecast period.

Leading Market Players: -

Abb Ltd.
Cummins Inc.
Eaton Corporation Plc
Kohler
Generac Power Systems
General Electric
Schneider Electric
Siemens Ag
Caterpillar
Vertiv Group Corp.

The report provides a detailed analysis of these key players in the global automatic transfer switch market. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, agreements, and others to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to highlight the competitive scenario.

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