The nuclear outlook on the Big Beautiful Bill
The dust has settled: It’s been one month since President Trump signed H.R.1, the One Big Beautiful Bill Act, after a lengthy and contentious reconciliation process. As drafts of the bill evolved through committees, the House, and the Senate, the fate of federal support for nuclear energy projects was often obfuscated.
The primary mechanism through which H.R.1 impacts the energy sector is through modifications to tax credits established by President Biden’s 2022 Inflation Reduction Act. The IRA, initially proposed as Biden’s Build Back Better agenda, sought to tackle climate change by reducing federal tax burdens to provide robust federal support for non–carbon-emitting energy projects. Technologies supported included wind, solar, geothermal, and nuclear.
As the reconciliation process moved through the House and the Senate, White House support for fossil fuel–enabled energy dominance and calls for reductions in spending waste made it clear that the modification or elimination of IRA credits (primarily through the acceleration of their phaseout timelines) would be a key point of the bill.
The result: The technologies hit hardest by H.R.1 are those that the Trump administration has been most vocally opposed to: solar and wind, which will see termination of 48E and 45Y production and investment tax credits in 2027, among other changes.
Hydropower, geothermal, and nuclear have fared better. Phaseout timelines remain unaccelerated for 48E and 45Y credits for the technologies, with construction needing to start by 2032–2033 in order to take advantage of this component of federal support.
Nuclear in particular—far and away this administration’s most favored clean energy technology—received direct support in H.R.1 through the creation of a new tax credit. This bonus credit will be available to advanced nuclear facilities that employ at least 0.17 percent of the population in the surrounding metropolitan area.
FEOC restriction: Plans for new construction in still-supported technologies are not yet entirely out of the woods, however. IRA credits now have a new, important restriction on foreign entities of concern (FEOC).
While the FEOC restrictions laid out in H.R.1 are complicated in scope, they are generally intended to reduce U.S. energy reliance on adversaries while simultaneously making those adversaries unable to take advantage of IRA credits. According to global law firm McDermott Will & Schulte, those adversaries, for practical purposes, include China, North Korea, Iran, and Russia, alongside parties with “material legal and/or financial relationships” with those countries.
While the spirit of these restrictions generally has bipartisan support, concerns have been raised over significant impacts on supply chains, regulatory uncertainty, and the infeasibility of applying these complicated rules. According to the not-for-profit thinktank Bipartisan Policy Center, “Promulgating guidance or regulations can be difficult and time consuming, even for statutory provisions that are far less complex than the new FEOC restrictions. Regulatory uncertainty is likely to stifle near-term investment as companies wait for guidance from the administration and assess their eligibility for the credits under the new requirements.”
Industry response: Still, many in the nuclear industry have seen the preservation of these credits as a massive win in line with the broader groundswell in support from state and federal governments for nuclear.
After the Senate passed their version of the bill, Nuclear Energy Institute president and CEO Maria Korsnick said in a press release, “We applaud the U.S. Senate for advancing policies that recognize the important role of nuclear energy to achieve a reliable, affordable and increasingly clean energy system.”
