Small nuclear, big momentum

Policy and regulatory support will help improve visibility and momentum but does not eliminate execution risk. Recent actions, including the ADVANCE Act and Executive Order 14300, introduce defined decision clocks and lower applicant burden (historically, major barriers to nuclear deployment). These measures reduce friction for projects already underway. The NRC’s fee cut to $148 per hour (from ~$318 per hour) lowers licensing costs, which can run into tens of millions for complex designs, while the Executive Order’s directive for ~18-month final decisions on new reactor applications adds real schedule discipline. TVA’s BWRX-300 Clinch River construction permit is the clearest test case, with an NRC decision potentially landing in late 2026. In parallel, the Department of Energy’s Reactor Pilot Program creates a second pathway, with at least three advanced reactors targeting criticality (achieving a self-sustaining nuclear chain reaction) by July 4, 2026, validating accelerated siting and early operation alongside NRC licensing. Federal tax credits extend into the 2030s, supporting project economics, but investor attention is shifting toward domestic-content and Foreign Entity of Concern (FEOC) compliance rather than credit availability.

While policy progress reduces friction, the harder challenge is physical execution. Supply chains, engineering-procurement-construction (EPC) capacity and cost control now set the SMR hierarchy as projects move toward delivery. Demand growth, particularly from power-hungry data centers running AI loads, has reshaped the U.S. SMR narrative, with these loads accounting for roughly 40% of the global pipeline and highlighting the scale of opportunity. However, supply chains remain the real constraint. Fuel strategy is a key differentiator; designs compatible with conventional low-enriched uranium (LEU) face fewer near-term constraints, while high-assay low-enriched uranium (HALEU)-dependent programs remain paced by DOE allocation and enrichment scale-up. At the same time, nuclear-qualified component manufacturing and experienced EPC capacity remain concentrated, creating bottlenecks as projects move from licensing into early procurement.

SMR economics are highly cost-sensitive in our numbers. Every ~$1,000/KW increase in overnight capital expenditure adds roughly $15–20/MWh to the Levelized Cost of Electricity (LCOE), which is the all-in cost per unit of electricity over a plant’s life. This reinforces that constructability and cost discipline, ultimately determining which projects advance. For context, first-of-a-kind (FOAK) SMR projects are targeting LCOEs in the $70–125 per megawatt-hour range, according to both company disclosures and DOE estimates. These costs are directly competitive with combined-cycle gas at $68–108/MWh for 2025 projects. The comparison with renewables is more nuanced. Utility-scale solar today averages $60–67MWh, but costs rise to $81–135/MWh once four hours of storage are added. Simply said,  we think 2026 will mark the inflection point where SMRs move from concept to credibility, and the winners will be defined not by ambition but by the ability to execute under real-world cost-and-supply constraints.