Transformer Bottleneck
This article was originally published in pv magazine - May 2025 Edition.
You can build an entire energy infrastructure project and still wait years to flip the switch. In today’s market, it’s not the modules or permitting that cause the longest delays. Clean Energy Associates’ Eddy Ji explains how high demand for transformers and other essential grid infrastructure equipment is slowing things down.
Transformer procurement is a deciding factor in whether a project can finish on time.
Lead times for medium-voltage (MV) and high-voltage (HV) transformers have ballooned from a few months to two or three years, and sometimes even longer. These system components, once considered routine, now represent one of the most serious bottlenecks in commercial and utility-scale solar development. Developers face a stark choice: pay a premium for scarce domestic inventory or broaden their sourcing strategy to include global suppliers.
Buyers of medium and high-voltage breakers are also experiencing long lead times. In most systems, transformers and breakers are delivered and installed in quick succession, if not at the same time — so delays in either one would change the commercial operating date (COD) and permission-to-operate (PTO) date.
Every day a system sits disconnected from the grid, developers lose revenue while system performance gradually declines. In the first year alone, most systems could lose 1% to 2% of performance due to natural degradation. This is true regardless of whether it’s connected to the grid and generating energy.
In a business where returns depend on delivering electrons on schedule, transformer delays carry a tangible cost, especially for projects with tight financing or aggressive revenue expectations.
Market forces
Several structural and market forces contribute to these delays. Global infrastructure spending surged during and after the Covid-19 pandemic, increasing demand for transformers across sectors. Many governments have been using infrastructure investments to stimulate their economies, accelerating transmission upgrades and adding pressure to transformer manufacturers.
At the same time, evolving safety standards have led developers to replace previously installed pole-mounted transformers with pad-mounted units on the ground — increasing order volumes for both new projects and retrofits of existing systems. These changes reflect a broader industry shift toward improved reliability and safety. Ground-mounted transformers allow cables to be buried underground, reduce fire risk, enhance worker accessibility, and support better containment of potential oil leaks or electrical faults.
Additionally, many utilities now require compliance with updated fire, seismic, and arc-flash protection guidelines, further accelerating the transition to newer and safer transformers. As these requirements become more common, developers must factor them into project planning and equipment procurement cycles.
Production capacity has struggled to keep up. Pandemic-era shutdowns disrupted supply chains, and manufacturing output has yet to catch up with the increasing demand. Adding to the strain, data centers, cryptocurrency operations, and other power-intensive industries now compete for the same production slots. These buyers often pay several times more money and demand faster delivery, effectively pricing out energy developers trying to stick to budget.
“In a business where returns depend on delivering electrons on schedule, transformer delays carry a tangible cost, especially for projects with tight financing or aggressive revenue expectations”
Fierce competition
Suppliers give higher priority to higher- paying customers, regardless of the product and service they provide. In a capital- constrained industry, some manufacturers’ production slots typically go to the highest bidder – not necessarily those who booked first. Meanwhile, existing manufacturers hesitate to expand capacity. Building transformer factories requires long-term capital investment, and policy uncertainty creates risk. Fluctuating tariffs, shifting industrial policy, and rising national security scrutiny increase hesitation to invest in new plants.
Developers must adapt. Some now pay two to four times the standard price just to stay on schedule. Others expand their supplier network, turning to manufacturers in other parts of the world.
Many so-called “domestic” suppliers in the United States and other regions don’t manufacture transformers themselves. They act as brokers, importing equipment, repackaging it, and reselling under their own brand. Developers who rely on these brokers already depend on global supply chains — just indirectly. Going directly to international manufacturers can reduce costs and shorten delivery timelines, but it requires more effort and a different set of skills.
Sourcing suppliers
Developers often hesitate to engage unfamiliar suppliers due to concerns about communication barriers, quality assurance, and regulatory compliance. Sourcing from a trusted local vendor sounds simple. But just like any long-distance relationship, global sourcing demands more work — yet can yield better outcomes if done right.
That is why a structured sourcing strategy matters. Based on CEA’s work across global markets, developers should prioritize five key criteria when evaluating suppliers: experience delivering to the project market, including familiarity with customs procedures; compliance with local and regional efficiency; electrical and safety standards; and verified products and factory certifications, such as ISO and third-party testing. Financial strength and customer references are also important to ensure supplier reliability, as well as low exposure to customs risk and geopolitical supply chain disruptions.
Even experienced buyers need dedicated support to manage this process. Developers should ask if a supplier has a record of successful deliveries to local utilities or EPCs. Can this supplier meet current technical specifications and provide the required traceability documentation upfront? Even capable manufacturers may fail to navigate local utility compliance without proper guidance.
Customs risks also warrant attention. While transformers haven’t faced major detentions under anti-forced labor enforcement policies, many developers now avoid sourcing from regions that are prone to geopolitical risk. Even without formal restrictions, future scrutiny could disrupt deliveries. Smart sourcing anticipates these risks.
To help in vetting potential suppliers, it is also helpful to have an expert partner with the necessary experience and knowledge – someone who can leverage local knowledge to identify qualified and reputable manufacturers with the track record and capacity to deliver your projects’ needs.
Transformer procurement no longer counts as a secondary task. It now determines whether a project finishes on time. Developers who plan ahead, broaden their sourcing strategy, and vet suppliers carefully will avoid costly delays and protect their margins. The transformer bottleneck won’t get resolved overnight. But with proactive planning and smart partnerships, developers can keep projects moving forward.
Eddy Ji is a Senior Manager on Clean Energy Associates’ global supply chain management team. His focus is on medium and high-voltage equipment. He also works directly with developers to source equipment, including PV modules, inverters, mounting systems, transformers, breakers, and other BOS components.
