Capacitor Bank Market Grows with Smart Grid and Renewable Energy Integration, Forecast to Hit $6.8 Billion

Rising Renewable Adoption Boosts Global Capacitor Bank Market Growth at 4.8% CAGR Through 2033

WILMINGTON, DE, UNITED STATES, September 24, 2025 /EINPresswire.com/ --

According to a new report published by Allied Market Research, the capacitor bank market size was valued at $4.3 billion in 2023 and is estimated to reach $6.8 billion by 2033, growing at a CAGR of 4.8% from 2024 to 2033.

Capacitor banks are critical electrical components composed of multiple capacitors connected in series or parallel to store energy. They enhance the efficiency of power systems by improving power factor, reducing transmission losses, and stabilizing voltage levels. These systems are widely deployed across industrial, commercial, and utility sectors to ensure reliable and efficient energy distribution.

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In modern grids, capacitor banks are essential for power factor correction (PFC). A low power factor leads to excessive reactive power, higher energy losses, and increased operational costs. By compensating for reactive power, capacitor banks improve power system efficiency, ensuring stable supply and reduced energy wastage.

Regional Outlook 🌐

In 2023, Asia-Pacific dominated the global capacitor bank market, with more than one-third revenue share. Rapid industrialization, infrastructure development, and growing renewable adoption across India, Japan, and Australia are fueling demand.

For instance, solar farms in India and Australia use capacitor banks to stabilize fluctuating output, while wind installations deploy them to improve power factor. This rising demand positions APAC as the fastest-growing region through 2033.

Key Market Dynamics 🌍

🌱 Growth Driver: Renewable Energy Integration

The rapid shift toward renewable energy sources such as solar and wind is one of the strongest drivers for the capacitor bank market. These sources often generate fluctuating output due to weather conditions. Capacitor banks help grid operators stabilize voltage, regulate fluctuations, and ensure smooth power delivery.

For example, in 2024, the Clean Energy Finance Corporation (CEFC) in Australia allocated over one-third of its $1 billion Household Energy Upgrades Fund to support energy-efficient upgrades, including capacitor banks for renewable integration. Similarly, Larsen & Toubro’s Digital Energy Solutions expanded across India, the Middle East, and North America, offering advanced Hybrid Energy Management and Control Systems (HECS) that integrate capacitor banks with renewable sources.

⚡ Restraint: Rising Competition from Alternatives

Despite growth, the market faces challenges from advanced power electronics technologies like Static VAR Compensators (SVC) and Static Synchronous Compensators (STATCOMs). These solutions offer faster response times, real-time regulation, and adaptability, making them attractive for modern smart grids.

In 2023, India’s POWERGRID commissioned a ±300 MVAR STATCOM at the Lucknow 400 kV substation, strengthening grid stability. Such innovations highlight the growing competition that traditional capacitor banks face. To remain competitive, manufacturers are focusing on advanced designs and digital integration.

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Segmentation Insights 🔍

The capacitor bank market is segmented by voltage, type, installation, connection type, application, and region.

By Voltage:

10 kV to 69 kV was the fastest-growing segment (CAGR 5.1%). These banks ensure consistent voltage in distribution networks and reduce power losses, making them vital for industries like data centers, hospitals, and manufacturing.

By Type:

Internally fused capacitor banks are projected to grow at 5.0% CAGR. Their automatic fuse operation allows systems to remain functional even if individual elements fail, reducing downtime.

By Installation:

Metal-enclosed substations dominate growth. Compact and factory-assembled, they house capacitor banks along with transformers and switchgear, providing safe and efficient solutions for industrial and commercial facilities.

By Connection Type:

The star connection segment led the market in 2023, growing at a CAGR of 5.0%, thanks to its efficiency in large-scale reactive power compensation.

By Application:

Industrial applications accounted for more than one-fourth of market share in 2023 and are expected to grow at 5.1% CAGR, supported by demand for reliable and stable power in energy-intensive industries.

Competitive Landscape 🏭

Key players in the global capacitor bank industry include:

Circutor

Toshiba Corporation

Vishay Intertechnology Inc.

Siemens

Enerlux Power s.r.l.

Comar Condensatori S.p.A

Hitachi Ltd.

ABB Ltd.

Eaton

EPCOS

These companies are investing in innovation to maintain competitiveness. For example:

In February 2024, Powerside launched the Pole-MVar, a pole-mounted tuned-filter capacitor bank designed to reduce harmonic distortion.

In 2023, Kyocera AVX introduced supercapacitor banks with low leakage and compliance with UL 810A standards.

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Future Outlook 🔮

The global capacitor bank market is set for steady growth, supported by renewable energy adoption, industrial expansion, and power system modernization. While competition from SVCs and STATCOMs presents challenges, innovations in internally fused systems, compact substations, and smart integration will sustain demand.

By 2033, capacitor banks will remain vital in ensuring reliable, efficient, and sustainable energy distribution worldwide.

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About Us

Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.

Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.

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Allied Market Research
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