Electric is the future, so the need for grid expansion and modernization is rising. Because of this growth, there is also an increased demand for insulators. Over the next few years, the electric insulator market could see some significant changes.

Like many industries, the insulator market stumbled amid the COVID-19 pandemic. However, the trends that emerged or accelerated in the wake of this disruption could lay the foundation for impressive future growth.

The global electric insulator market was worth an estimated $12.6 billion in 2021, according to a September 2022 report from Allied Market Research. Over the next 10 years, that figure could balloon to beyond $20 billion, though growth won’t likely come all at once. In the immediate future, it’ll largely take the form of recovery from COVID-related disruption.

While electrical systems have become increasingly crucial amid pandemic-era digitization, new infrastructure projects paused. Consequently, demand increased while social distancing restrictions delayed nonmission-critical work, leaving considerable backlogs. Supply chain issues heightened these disruptions as shutdowns made it challenging to acquire materials on time.

Heading into 2023, public infrastructure projects are starting to catch up. These backlogs now provide a steady stream of business for expanding grids and the insulating equipment they rely on. Government projects such as 2021’s Infrastructure Investment and Jobs Act (IIJA) pave the way for future growth beyond recovery.

One of the most significant drivers of this growth is the rising trend toward environmental sustainability. Experts at the International Energy Agency predict renewable power will grow as much in the next five years as it has in the last 20, accounting for 90% of global energy expansion.

In addition to increasing overall electrical infrastructure, renewables have unique insulation needs. Reliability is often a greater concern with wind and solar power, as generation varies by uncontrollable natural elements, not demand. Proper insulation ensures electrical systems work correctly, so the market could play a critical role in the green power transition.

Relatedly, the need for grid modernization has become increasingly apparent in light of rising renewable infrastructure and recent outages. As the nation looks to upgrade its aging electrical infrastructure to prevent disruptions and support renewables, it’ll need more reliable insulation.

Growing international markets

As the electric insulator market develops over the next few years, businesses may want to set their sights internationally. While the IIJA and grid modernization efforts will boost domestic opportunities in the short term, the Asia-Pacific region will likely see the most long-term development.

According to a study from Mordor Intelligence, Asia-Pacific will see high growth through 2027, while the rest of the global market will grow more moderately. This trend largely stems from nations such as China, Japan and India making considerable investments in clean energy and grid expansion.

The same study holds that China will account for 40% of global renewable power before long. That’s unsurprising given the nation’s target of producing one-fifth of its electricity from nonfossil-fuel sources by 2030. While India isn’t investing as heavily in renewables, its grid is increasing as it aims to support its skyrocketing population.

Potential challenges on the horizon

While many current trends suggest a positive future for the electric insulator market, some roadblocks still need solving. One of the most familiar of these is material shortages. Pandemic-era shutdowns have subsided, but long backlogs remain for many sources. Ongoing issues like the conflict in Ukraine could also make it complex to acquire enough materials to sustain growth.

Another potential issue is the rising prominence of overhead power lines. Transmission lines may be critical to renewable energy and these cables lack insulation to extend their effective range. Consequently, the shift to renewable power may inhibit the insulator market long term, even if it boosts it in the short term.

These challenges don’t necessarily mean the market won’t grow over the next few years. However, they do suggest insulation companies should consider how they might influence their business and adapt accordingly to minimize their impact.

Despite some lingering challenges, the electric insulator market’s overall outlook is promising. If businesses can capitalize on these opportunities early, they could enjoy impressive growth in the future.