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For decades, electrical engineers have dreamed of a device that can seamlessly connect solar panels, battery systems, and on-site generators to high-powered equipment like EV chargers or data center servers, without loads of expensive hardware to make it all work together.
Now, these devices, called solid-state transformers, are actually starting to hit the market — and they couldn’t be coming at a more opportune time.
That’s because the technology could be key to dealing with the torrent of power demand from data centers, factories, and electric-vehicle charging hubs that threatens to overwhelm the grid and cause utilities to burn more planet-warming fossil fuels.
Right now, these large electricity customers are clamoring for more power than the U.S. grid can easily supply. In theory, this problem could be solved by allowing them to install their own solar arrays, batteries, and generators on site — ideally as a microgrid — but that seemingly simple solution is actually complicated and costly to execute.
Every solar array, battery, fuel cell, generator, or other source of on-site power requires multiple pieces of equipment — electrical protection gear, isolation transformers, step-up and step-down transformers, power converters — to safely turn direct current into alternating current or vice versa, and to raise or lower voltages to match the needs of different loads within a building.
Solid-state transformers can do all that from a single device, controlling electricity as nimbly as routers control the flow of data. That’s particularly valuable when it comes to managing equipment with high power needs, like EV chargers, or with extremely sensitive requirements for power quality, like the server racks populating data centers.
So says Haroon Inam, CEO and cofounder of DG Matrix, one of a handful of companies starting to get solid-state transformers into real-world applications. DG Matrix raised $20 million in March and is building a factory in North Carolina, set to open late this year, that will be capable of producing up to 1,000 units annually, he said.
“We’re hitting the massive underserved commercial and industrial microgrid market,” he said. “People haven’t done it because it costs so damn much to build individual snowflake microgrids.”
DG Matrix is not the only firm working on this. Heron Power, a startup founded by Tesla alum Drew Baglino, has raised $43 million in funding with the goal of building its first solid-state transformers in 2027. Amperesand raised $12.5 million last year to continue developing solid-state transformers being tested on Singapore’s power grid.
Major electronics companies are interested. Electrical equipment giant Eaton last month agreed to acquire Resilient Power Systems, which raised $5 million in 2021 to build and deploy its power-conversion devices for EV charging hubs and other energy-hungry settings. Eaton will spend $55 million on the company on closing; additional payments based on Resilient Power’s financial and technological performance in the coming years could total another $95 million.
“People have been working at this technology for well over a decade,” said Aidan Graham, senior vice president and general manager of Eaton’s critical power solutions business. But now, following several key engineering advances, the technology may finally be ready for primetime — and utilities and others are starting to test it out.
Eaton has been working on solid-state transformers for years. The company isn’t saying how it intends to scale up manufacturing and deployment of Resilient Power’s technology. But “there are a couple of branches we’re chasing,” Graham said, including EV charging and integrating batteries into data centers and other critical environments, “where people‘s lives are on the line, or a lot of money is on the line, if the power goes out for even a fraction of a second.”
Michael Wood III, DG Matrix’s chief of staff, said the company is testing its devices with companies including electrical-equipment manufacturing giant ABB, North Carolina-based utility Duke Energy, and PowerSecure, a major microgrid and data-center power system developer owned by utility Southern Co.
“The best way to get the next gigawatt of energy is to build distributed systems,” Wood said. “Today, you need all of this gear to make those projects work. DG Matrix eliminates all that balance of systems and boils it down to a single system.”
Using a DG Matrix solid-state transformer can cost half as much as using the standard mix of multiple technologies to connect the components of a typical on-site microgrid, Inam said. It also makes it a lot simpler to quickly mix and match devices or to change up the configuration of systems at data centers, EV charging hubs, and other potential microgrid sites.
So if solid-state transformers are such a useful technology, why are they just now getting into the field?
There are good reasons why it’s taken so long, said Vlatko Vlatkovic, a veteran of General Electric’s industrial electrification business and a partner at DG Matrix investor Clean Energy Ventures, who joined the startup’s board of directors this year.
Much of the power grid relies on electromechanical devices that operate in relatively simple ways that haven’t changed much in a century. Despite recent advances that have enabled things like solar inverters or electric-vehicle drivetrains, the same kind of semiconductors that make modern computing possible have yet to be applied widely to the power grid.
“It’s always been a big challenge to move that industry towards using more power electronics,” Vlatkovic said, particularly at the higher voltages of electricity on the grid. Until relatively recently, the underlying technology “wasn’t big enough, wasn’t reliable enough. There were technical issues.”
Similar challenges have dogged solid-state transformers in higher-voltage industrial applications, said Neal Dikeman, a partner at Resilient Power investor Energy Transition Ventures. Consistent advances in silicon carbide semiconductors have helped, as have strides in the computing ability required to make them effective at power conversion, he said. “But that doesn’t make it easy.”
Inam, who served as chief technology officer at grid power-controls provider Smart Wires before joining DG Matrix in 2023, noted several key challenges that the startup had to solve to get to this point.
Dissipating the heat created by converting alternating current and direct current at high voltages is tricky, for one. So is dealing with “electromagnetic noise,” or interference caused by that same high-frequency electrical switching. “If you don’t understand how to critically mitigate that noise, it gets into everything. It causes overheating, blow-ups, and misperformance,” Inam said.
Solving those challenges has its rewards, however. “We’re at the point where the technology is mature enough and good enough so that we can introduce reliable devices,” Vlatkovic said.
The timing couldn’t be better.
“Everything’s being electrified, from cars to industry to housing,” Vlatkovic said. “If you look at the projections for what the grid needs to deliver over the next 10 to 20 years, at a minimum we have to double the capacity of the grid. Some projections say we need to triple what we have.”
Meeting power demand from data centers is a particularly big opportunity, Inam said.
Tech giants’ AI ambitions are taxing the grid capacity of utilities in data center hot spots like Virginia, Georgia, and Texas. That’s led data center developers to explore ways to reduce the stress they put on grids — including the potential for generators and batteries built nearby or on site.
“The three big problems are speed to power — customers can’t get power fast enough — cost of power, and the ability to aggregate multiple resources to reach flexibility,” Inam said. “We talk to enterprise customers with hundreds or thousands of sites. Their biggest challenge is having to design every single one from scratch. They’re looking for a turnkey solution to the challenge of not having to deploy one, but having to deploy 1,000.”
Solid-state transformers can help meet those needs, Vlatkovic said. “You go from complex installations and multiple companies to one company doing everything.”
Packing more capabilities into a smaller “power-dense” package also saves valuable space in tight environments like data centers and EV charging sites, Eaton’s Graham said. And solid-state transformers can be made en masse in factories, reducing the cost and time spent on electrical labor on job sites. “You’ve pulled that back into a controlled manufacturing environment,” Graham said.
Plus, having a single device that can perform multiple tasks simplifies engineering needs, Dikeman said.
“If you’re using off-the-shelf components and designing a complex system, the mismatching of” different devices that don’t perfectly match the needs of the system “drives up costs and drives down efficiency,” he said. “You can get around that by building custom stuff — but that’s more expensive and more risky. When you get to solar and storage and data centers and people who need to go fast and need things that are reliable and cheap, all of that breaks down.”
All of these potential benefits have led PowerSecure, the microgrid developer, to launch pilots of at least two solid-state transformer technologies, including its tests with DG Matrix, said Joaquin Aguerre, the company’s director of strategic portfolio development. “We’re trying to be in front on this technology.”
PowerSecure has designed and installed more than 2.4 gigawatts of microgrid capacity for customers ranging from big-box retailers and hospitals to utilities and data centers. It’s particularly interested in solid-state transformers to integrate power-efficient “hybrid microgrids” that combine “solar, energy storage, natural-gas generators, fuel cells, EV charging, you name it,” Aguerre said.
“There is starting to be a real market need,” he said. At the same time, “the majority of these companies are still in the early stages. … The next logical step is doing proper pilot programs, to see real customer use cases at a smaller scale” and to test the durability and reliability of the technologies in question.
After all, whatever their drawbacks compared to cutting-edge power electronics, traditional transformers “don’t fail that often,” Aguerre pointed out. “Everyone’s going to expect the same reliability for whatever solid-state transformer they’re looking at.”
A clarification was made on Aug. 19, 2025: This story originally stated that Eaton will pay $55 million to acquire Resilient Power. The piece has been updated to clarify that the deal also includes additional payments contingent on Resilient Power’s performance over the next couple of years.
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