Long-Lead Equipment and Transformers

Long-Lead Equipment and Transformers

LEARN / REINDUSTRIALIZATION

Long-Lead Equipment and Transformers

More than ninety percent of the electricity consumed in the United States passes through a large power transformer, and roughly four in five of those installed are imported. Lead times now run to years, which means equipment availability has overtaken capital and permitting as the constraint that sets an industrial project date.

Key points

Why transformers gate everything

A transformer changes voltage, and nearly every path electricity takes from a generator to a factory crosses at least one. The Department of Energy states that more than 90 percent of American consumed power passes through a large power transformer, which makes the class a genuine single point of dependence for the system rather than one component among many.

Data90% · 82%
Share of U.S. consumed power that passes through a large power transformer, and the approximate share of large power transformers installed in the United States in 2019 that were imported. Source: U.S. Department of Energy, The Supply Chain Crisis Facing the Nation’s Electric Grid, December 2022.

Series and provenance
Agency
U.S. Department of Energy
Program
The Supply Chain Crisis Facing the Nation's Electric Grid, December 2022
Series
Large power transformer dependence and import share
Measure
U.S. reliance on large power transformers
Units
Percent
Period
Installed base as of 2019; lead times as of 2022
Latest
More than 90 percent of consumed power passes through a large power transformer; approximately 82 percent of those installed in 2019 were imported
Source tier
Primary
Retrieved
August 9, 2026

Lead time figures in this entry come from a second-quarter 2025 industry survey reported through trade press rather than from an agency release, and are marked at lower confidence. Distribution transformers and large power transformers are separate markets that have moved in opposite directions since 2022.

Open the source

These units are not stocked. Each is engineered to a specification, built to order, and shipped as an oversized load requiring route surveys and sometimes rail. There is no inventory to draw down when demand rises, which is why the market responds to a demand surge with lead time rather than with price alone.

What the lead times are

A second-quarter 2025 industry survey put standard power transformers at 128 weeks for delivery and generator step-up units at 144 weeks, with some specialised orders extending to four years. Before the pandemic, comparable units were quoted in months. Demand explains part of it: generator step-up transformer orders grew 274 percent between 2019 and 2025 and substation transformer orders 116 percent, against manufacturing capacity that did not move at anything like that rate.

Measurement note“The transformer shortage” refers to two markets behaving differently. Distribution transformers, the pole-top and pad-mount units serving buildings, have recovered substantially, with waits reported down to roughly 30 weeks by the second quarter of 2025. Large power and generator step-up units remain above two years. A source citing improvement and a source citing crisis can both be current and be describing different equipment.

Institute analysisFor an industrial developer, equipment availability has displaced capital and permitting as the constraint that sets the schedule. That is a reversal of the usual ordering in project planning, and it is not reflected in how most industrial policy is designed, which addresses the cost of building rather than the availability of the things a build requires.

The material underneath

Transformer cores require grain-oriented electrical steel, a specialised product made by very few producers worldwide, and only one in the United States. A programme to expand domestic transformer manufacturing therefore runs into a sub-tier dependency one layer down, in exactly the pattern that industrial capacity assessments built on aggregate statistics fail to detect.

Roughly $2 billion in North American transformer manufacturing expansion has been announced, with new capacity projected from 2028. That does nothing for projects executing before then, which face the market as it stands, and it will draw on the same constrained steel supply once it opens.

Common misconceptions

That the shortage is uniform. Distribution units have largely recovered while large power and generator step-up units have not. The category matters more than the word.

That announced factory expansions resolve it. Announced North American capacity is projected from 2028, and every project executing before then faces current lead times.

That this is a price problem. Prices have risen substantially, and the binding constraint is delivery date. A developer able to pay more still waits.

What the evidence says, and where it is contested

ContestedWhether this is a manufacturing shortage or a procurement failure is genuinely disputed. One position holds that years of underinvestment left domestic capacity too small for a demand surge, and that only new plant resolves it. A second, advanced by some market participants, holds that the physical capacity exists and that procurement practice is the bottleneck: buyers order late, specify bespoke designs where standard units would serve, and do not hold slots. The distinction matters because the two call for different responses, and the available lead time data cannot separate them.

Related Institute research

Critical Supply-Chain Dependencies
Why the constraint sits one tier below where anyone is looking.

Equipment and Tooling
The same pattern in machine tools.

The Interconnection Queue
The administrative clock running alongside this one.

Sources

Reference entry maintained by the Institute for American Manufacturing & Technology. Figures are drawn from primary sources and cited above. Where the Institute states a position rather than a finding, it is marked as such.

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