This paper addressed the challenges associated with the complexity, numerous parameters, computational resource demands, and slow processing speed of transformer fault identification models based on deep learning technologies. Sparse convolutional neural network (CNN) approach is proposed for identifying faults related to dissolved gases in oil. Leveraging an improved Gramian angular field, one‐dimensional fault samples are converted into two‐dimensional feature images and data augmentation is implemented to meet the input requirements of deep learning models. Building upon visual geometry group (VGG)19 and residual networks (ResNet)50 networks for fault diagnosis, sparsity techniques are introduced through pruning, the fusion of convolution layers and batch normalization layers, and parameter quantization. Numerical experiments and performance evaluations on dissolved gas in transformer oil fault data demonstrate that the proposed method effectively reduced model complexity, minimized parameter count, conserved computational resources, and improved processing speed while maintaining a considerable level of fault identification accuracy. This made it applicable to edge computing platforms characterized by small form factors and low power consumption in the power industry.