Although autotransformers have less cost, better regulation and low losses as compared ordinary two-winding transformer of same rating. But still they are not widely used due to one major disadvantage that the secondary winding is not insulated from the primary. If an autotransformer is used to supply low voltage from a high voltage and there is a break in the secondary winding, full primary voltage comes across the secondary terminals which may be dangerous to the operator and equipment (load). Therefore, it is advisable not to use an autotransformer for interconnecting high-voltage and low-voltage system. Their use is only limited to the places where slight variation of output voltage from the input voltage is required. The other disadvantages are as follows:
- The effective per unit impedance of an autotransformer is smaller compared to a two-winding transformer. The reduced internal impedance results in a larger short-circuit (fault) current.
- In an autotransformer, there is a loss of isolation between input and output circuits. This is particularly important in three-phase transformers where one may wish to use a different winding and earthing arrangement on each side of the transformer.

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