55% of the U.S.’s distribution transformers are over 33 years old. They’ll need to be replaced soon. And, because of new EV, datacenter, and renewable projects, transformer capacity will need to increase by up to 260% by 2050.
What does this mean?
It means demand for transformers isn’t going down anytime soon. If you’re planning a datacenter or renewables project, you’re competing for the same short supply as the rest of the market. You’ll need a plan to procure the transformers you need for your projects.
Problems with Increased Demand
There are two major problems with the projected demand for transformers. First, it exceeds available capacity. Second, the U.S.'s grid is already old and needs updating.
Available Capacity
60–80 million distribution transformers are currently in service. The demand for these transformers is expected to grow by 260% by 2050 (Compared to 2021). The total demand for electricity could be 14% to 19% higher in 2030 than 2021 levels. By 2035, it could be 27% to 39% higher.
This spells demand for millions of new transformers in the next 25 years. What exactly is driving it?
EV Demand
Every major auto manufacturer now sells some kind of electric or hybrid vehicle. Building EV cars and a charging network to support them is big business and requires a lot of power. And a lot of transformers. The DOE estimates that widespread EV adoption will, by 2050, increase electrical use by 40%.
Datacenter Demand
By 2026, 6% of the available electricity in the U.S. will be used to power datacenters. The U.S. datacenter footprint will absorb 35 gigawatts by 2030. This is more than twice the 17GW total in 2022, according to a new U.S. Data Center Market report from Newmark.
Renewable Energy Demand
To meet the growing demand for electricity, the United States has invested heavily into renewable energy. In 2024 solar projects alone added an estimated 39.6 gigawatts (GW) of capacity, compared to 27.4GW in 2023. Battery storage projects are expected to grow by a whopping 47% this year. But all these new solar, wind, and BESS projects also require transformers.
The new demand for transformers from these projects is overwhelming an already stressed supply chain. This is forcing many manufacturers to push distribution transformer lead times out months or sometimes even years. (Struggling with this? Give Maddox a call.) But it’s not the only issue. There is also demand to replace existing electrical equipment.
Aging Electrical Grid
Most of the U.S.’s electrical grid was built in the 1960’s and 70’s. In its 2015 infrastructure review, the DOE found that 70% of U.S. transmission lines are more than 25 years old. The life cycle for these transmission lines is only about 50 years. This means that a huge percentage of the electrical grid is approaching the end of its life.
Transformers are part of this aging grid. 55% of the U.S.’s distribution transformers are already more than 33 years old. The problem? The average lifespan of these units is around 40 years. Their failure rate will drastically increase after 2030. These old transformers leave utilities and customers vulnerable.
Manufacturing & New Demand
Any electrical grid overhaul requires a huge manufacturing effort. New equipment needs to be built—and lots of it.
But supply chain delays and raw materials shortages aren’t going to make this easy. For transformers, raw materials and other components are more expensive than ever. The rise of EV manufacturing has driven up demand for electrical-grade steel, making it more difficult to source. Steel once available for transformer cores is now used in EV charging stations.
Add to this the uncertainty introduced by recent tariffs. A large amount of the U.S.’s electrical steel is imported. Other transformer parts made abroad will also see a price increase. While domestic initiatives, like the CIRCUIT Act, aim to provide long-term solutions, these tariffs could impact the electrical industry in a big way.
What’s the Solution?
It’s not just the expanding datacenter and renewables markets that need new electrical infrastructure. All industries are affected by the rapid expansion. And all industries need a plan to keep the power on.
A significant part of this plan will be sourcing transformers. Whether you’re putting together a datacenter or hooking up a CNC machine, plan ahead.
Finding Transformers
You need to find a supplier that has a deep stock of transformers. If you’re trying to get the power on, you can’t wait three years for the right transformer to be available. Remanufactured transformers are a great option to beat the long lead times. At Maddox, we buy and remanufacture transformers at our locations across the country. We also build new transformers in common voltages to stock. This means we have transformers ready to ship in an emergency or when your project has a tight deadline.
Build for the Future
Electrical demand will keep growing. You need to build for the future. Not just for your current needs today. Order transformers with future demand in mind.
Buying materials sooner in the planning process is key. Maddox has a huge inventory, but that inventory is in high demand.
Try to plan with flexible specs and configurations. If you have more wiggle room with your transformer specs, we can get you what you need even sooner.
You should also consider ordering transformers with future capacity in mind. If you plan on expanding, look at buying a slightly larger kVA sized transformer than your current needs. Or purchase a unit with 55/65° temperature rise for the 12% overload above rated kVA. Another option is to purchase a unit with FR3® Fluid. This will help extend your transformer's life expectancy by preserving its insulation.
If you are feeling the stress of long transformer lead times. Fill out the form below. We’d love to help plan and power on your next project.
