A distribution transformer or service transformer is a transformer that provides the final voltage transformation in the electric power distribution system, stepping down the voltage used in the distribution lines to the level used by the customer. The invention of a practical efficient transformer made AC power distribution feasible; a system using distribution transformers was demonstrated as early as 1882.
If mounted on a utility pole, they are called pole-mount transformers. If the distribution lines are located at ground level or underground, distribution transformers are mounted on concrete pads and locked in steel cases, thus known as pad-mount transformers.
Distribution transformers normally have ratings less than 200 kVA, although some national standards can describe units up to 5000 kVA as distribution transformers. Since distribution transformers are energized for 24 hours a day (even when they don't carry any load), reducing iron losses has an important role in their design. As they usually don't operate at full load, they are designed to have maximum efficiency at lower loads. To have a better efficiency, voltage regulation in these transformers should be kept to a minimum. Hence they are designed to have small leakage reactance.