A transformer does not require any moving parts to transfer energy. This means that there are no friction or windage losses associated with other electrical machines. However, transformers do suffer from other types of losses called “copper losses” and “iron losses” but generally these are quite small.

Copper losses, also known as I2R loss is the electrical power which is lost in heat as a result of circulating the currents around the transformers copper windings, hence the name. Copper losses represents the greatest loss in the operation of a transformer. The actual watts of power lost can be determined (in each winding) by squaring the amperes and multiplying by the resistance in ohms of the winding (I2R).

Iron losses, also known as hysteresis is the lagging of the magnetic molecules within the core, in response to the alternating magnetic flux. This lagging (or out-of-phase) condition is due to the fact that it requires power to reverse magnetic molecules; they do not reverse until the flux has attained sufficient force to reverse them.

Their reversal results in friction, and friction produces heat in the core which is a form of power loss. Hysteresis within the transformer can be reduced by making the core from special steel alloys.

The intensity of power loss in a transformer determines its efficiency. The efficiency of a transformer is reflected in power (wattage) loss between the primary (input) and secondary (output) windings. Then the resulting efficiency of a transformer is equal to the ratio of the power output of the secondary winding, PS to the power input of the primary winding, PP and is therefore high.

An ideal transformer would be 100% efficient, passing all the electrical energy it receives on its primary side to its secondary side. But real transformers on the other hand are not 100% efficient. When operating at full load capacity their maximum efficiency is nearer 94% to 96%, which is still quite good for an electrical device. For a transformer operating at a constant AC voltage and frequency its efficiency can be as high as 98%. The efficiency, η of a transformer is given as: