US Digital Substation Market Size Likely to Grow at a CAGR of 7.92% By 2034

Market Size and Growth

As per the US Digital Substation Market size analysis conducted by the CMI team, the US digital substation market is expected to record a CAGR of 7.92% from 2025 to 2034. In 2025, the market size was USD 1.92 Billion. By 2034, the valuation is anticipated to reach USD 3.81 Billion.

Overview

As per the industry experts at CMI, the U.S. digital substation market is likely to witness a decent CAGR during the forecast period. This could be attributed to the increasing need for modernizing aging infrastructure, integrating renewable energy, and meeting the grid resilience goals via digital technologies and advanced automation. The key factors include adoption of cloud solutions and IoT for data management, inclination toward smart grid initiatives, and rising investment from government programs such as the Infrastructure Investment and Jobs Act (IIJA). However, it’s challenging on the part of small players to bear higher initial investment costs.

Key Trends & Drivers

• Call for Renewable Energy Integration to Determine Growth: Digital substations are important in order to manage complexities pertaining to the integration of variable renewable sources such as wind and solar power. This also aligns with a pressing need for updating legacy electrical networks for better reliability and efficiency. Expansion of smart cities connected through smart grids needs advanced digital substations.

• Rising Demand for EV Charging Networks to Catalyze the Market: The expansion of EV infrastructure is creating a visible demand for various digital substations that are capable of managing new loads and ascertaining the stability of the grid. Innovations in IoT, software-defined automation, cloud computing, and SCADA systems are improving the performance, thereby driving adoption of digital substations.

Report Scope

SWOT Analysis

• Strengths: Digital substations foster real-time monitoring, control, and automation. They are also helpful in reducing power losses. Another strength is that of better reliability of the grid with quicker fault detection. The overall digitalization helps in speeding up the operations, with flawlessness being the topmost priority.

• Weaknesses: Higher initial investment in digital infrastructure and technology is acting as a restraint. Networked systems are subject to cyberattacks. Also, digital substations need specialized, ongoing maintenance as well as requests. Non-adherence to standards by smaller players is also a constraint.

• Opportunities: Digital substations are amongst the core components of expanding smart grids. They do facilitate integrating intermittent renewable sources of energy. Advanced technologies such as AI, IoT, and cloud computing could be leveraged for data analytics and predictive maintenance. Initiatives such as the U.S. Department of Energy’s IIJA make provisions for modernization of the grid.

• Threats: Retrofitting the legacy systems is costly, complex, and cumbersome. Dearth of professionals could slow the adoption. Also, data theft is something that can’t be ignored. It could shake the belief of end-consumers in digital substations.

List of the prominent players in the US Digital Substation Market:

• General Electric (GE)
• Cisco Systems Inc.
• Honeywell International Inc.
• Emerson Electric Co.
• Schweitzer Engineering Laboratories (SEL)
• Others

The US Digital Substation Market is segmented as follows:

By Module

• Hardware
• Fiber-optic Communication Networks
• SCADA

By Insulation

• Transmission Substation
• Distribution Substation

By Voltage

• Up to 220 kV
• 220-500 kV
• Above 500 kV

By Application

• Utility
• Heavy Industries
• Transportation