One Big Beautiful Bill Act: Nuclear Energy Stays at the Top of the Mix

Guest Expert Post  

Nuclear energy is leading the pack among energy options thanks to bipartisan support for the clean, reliable, dispatchable, and sustainable power. Republican lawmakers spared its fate in the One Big Beautiful Bill Act (OBBBA) — and even added a few new perks for nuclear generation. 

The Positives 

Operators and developers of nuclear fission energy still qualify for the full value of the 45Y clean electricity production tax credit (PTC) and the 48E investment tax credit (ITC), as long as formal construction begins on their facilities by 2033. As under the Inflation Reduction Act, these credits are set to phase out gradually each subsequent year through 2035. Projects that start construction in 2036 will receive no credits under the current phase-down schedule.  

In addition, nuclear-generated electricity still qualifies for the 45U zero-emission nuclear power production credit until 2033. However, as it has for other types of energy, OBBBA prohibits “specified foreign entities” (including Foreign Entities of Concern (FEOC) and others) from accessing 45U after 2025 and prohibits foreign-influenced entities from doing the same after 2026. 

OBBBA also rewards communities that have (or have had at any time since 2010) at least 0.17% of direct employment in “the advancement of nuclear power” eligible for the 45Y credit “energy community” tax credit bonus from the Inflation Reduction Act. That direct employment can be in advanced nuclear R&D, front- and back-end fuel cycle activities, and nuclear-related manufacturing. It also includes advanced nuclear facilities — if the Nuclear Regulatory Commission (NRC) has authorized construction and a site-specific construction permit or a combined license for the facility in question (pg. 195-96). While the bill does not mention reactor uprates or restarts outright, nuclear policy experts speculating that these activities could also qualify for this credit plus-up.   

Lawmakers also remain keen on the U.S. military making good on its years-long efforts to adopt nuclear technology for safe and reliable power. OBBBA slated $125 million in new funding to develop portable nuclear reactors for military applications (page 48). Separately, the House and Senate Appropriations Committees are looking to shore up advanced nuclear, with a focus on small modular reactors, for military use in the Fiscal Year 2026 National Defense Authorization Act. 

The Negatives 

It’s not all rosy, however. For example, nuclear companies can still qualify for loan guarantees from the U.S. Department of Energy’s Loan Programs Office (LPO), but OBBBA scrapped the office’s focus on lowering emissions. It also reduced the office’s available credit subsidies, which means the LPO has less ability to provide loans. In addition, the OBBBA’s new restrictions for 45Y and 48E on assistance from FEOC and other foreign assistance, including the use of material assistance from prohibited entities, also applies to nuclear technologies (pg. 182). In fact, the new FEOC provisions increasingly restrict Chinese-made physical components and company relationships. These hurdles could complicate large, multinational infrastructure developments, such as nuclear projects, whose developers may source materials and contractors from many locations.  

Unfortunately, the OBBBA punted on the tax treatment of fusion energy, which is a miss, because fusion technologies are promising, exciting, and innovating quickly. But Congress revisits energy tax law every few years, so—hopefully—fusion developers will have future opportunities to advocate for more favorable tax incentives.  

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In this politically tumultuous era, my friends at Silverline are poised to position your nuclear business at the center of the DC energy conversation and can help you translate the technical genius of nuclear technology for each of your audience segments, from policymakers and funders to the media.