Nuclear power advocates warn that the industry’s recent growth could be halted by the cuts to clean energy incentives advanced by House Republicans as part of the sweeping fiscal overhaul meant to implement much of President Donald Trump’s domestic agenda. 

The cuts were included in the tax portion of the legislative package approved Wednesday morning by the House Ways and Means Committee.

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The GOP bill cuts a number of subsidies for clean energy, including tax credits that benefit nuclear power. 

Specifically, it curbed the credit known as 45U, which offers subsidies for existing facilities that generate zero-emission nuclear power for electricity. It also limited section 45Y, an emissions-based tech-neutral tax credit that incentivizes zero-carbon energy production, and 48E, another emissions-based tech-neutral subsidy for facilities generating clean energy. 

Nuclear industry advocates and Republican lawmakers had asked the committee for weeks to protect these credits to maintain and expand the existing nuclear power fleet in the United States, as several new smaller nuclear projects are anticipated to come into service at the start of the next decade. 

Following the bill’s introduction and committee approval, though, panic has spread within the industry that Congress could be moving to eliminate the credits. 

“Nuclear [energy] has gotten a lot of public support, I think, from leadership … in the administration and yet this proposal really does not reflect the support that’s been expressed publicly,” Brad Townsend, vice president for policy and outreach at the Center for Climate and Energy Solutions, told the Washington Examiner. 

“I think, from our perspective as written, this proposal could really stop the nuclear revival dead in its tracks,” Townsend said. 

Republicans have moved to phase out all three tax credits by the end of 2031 — a full year earlier than the earliest date any of them would phase out under the current tax code. 

The GOP bill would phase out all three credits starting in 2029, with qualified recipients receiving only 80% of the credit. That percentage drops to 60% in 2030, 40% in 2031, and 0% for any year after. 

The bill would also require qualified facilities to have been “placed in service,” meaning permitting and construction have been completed and the facility is operational, to receive these credits at any point during this phase-out period. 

With these deadlines, the most recently announced nuclear energy projects, such as small modular reactors, risk not receiving any part of the credit. 

“I think it is important to consider that those SMRs are obviously, again, going to take several years to get placed into service,” Townsend said. “And not only does the credit phase out itself … undermine the right sort of the timeline for a lot of those projects, the fact that it’s placed in service as well, rather than commence construction effectively, means there’s not an SMR that would qualify for this credit.” 

Toward the end of last year, several major tech companies announced investments in advanced nuclear projects to secure the energy needed for their power-hungry data centers and artificial intelligence projects. 

Google plans to work with Kairos Power to purchase nuclear energy from several SMRs. The first is expected to come online by 2030, and additional reactors are anticipated to be in service by 2035. 

Amazon is also investing in three SMR projects in Virginia and Washington State, with those anticipated to come online by the early 2030s. 

“Literally every one of those deals that I am aware of is predicated on the tech-neutral tax credits in the [Inflation Reduction Act] and also the [Loan Programs Office] financing,” Ted Nordhaus, founder and executive director of the Breakthrough Institute told the Washington Examiner, referring to funding from the Department of Energy’s LPO, which is also set to be have its funding reduced by Republicans’ fiscal legislation. 

“If those things go away, those deals are not going to happen,” he said.

The Ways and Means tax proposal would save the treasury a lot in federal subsidies — about $193 billion over the next 10 years, according to the Joint Committee on Taxation. But Nordhaus warned that it would come at a high cost for the nuclear energy industry. 

“If you want to get early stage next generation nuclear technology to market [and] commercialized in the next decade, much less in this term which is what this administration says it needs to do, They need these tax credits you know, either need to be preserved or you know they need to replace them with something else,” Nordhaus said. 

The legislation has an uphill battle before arriving on the president’s desk. 

Several Senate Republicans have since indicated their opposition to the nuclear credit phase-out in the proposed tax-cut package, emphasizing the importance of those subsidies to bolstering development. 

“I think that the newer credits that have yet to really be applied will need to be extended beyond 2029,” Sen. Kevin Cramer (R-ND) told the press on Tuesday. “I would expect we will make some changes to try and improve it.”

GOP leadership aims to pass the legislation through budget reconciliation, which allows bills to bypass the filibuster and pass with only a simple majority in the Senate. With Republicans enjoying only a slim majority and thus needing the votes of nearly everyone in the party, Nordhaus said, there is reason to believe the current text will change by the time it hits the Senate floor. 

But until any changes are made, newly announced projects face much uncertainty, which Nordhaus described as the “kiss of death.” 

Ryan Pickering, an energy developer and nuclear power advocate, said the uncertainty could result in a hold on private investments. He explained that this can also be attributed to too much focus on advanced nuclear projects that rely so heavily on federal support in recent months and years. 

“That was a mistake, and the investment community should take some losses for that mistake, because they rejected existing nuclear as bad in favor of non-existent nuclear,” Pickering told the Washington Examiner. 

Pickering said, however, that he is confident that nuclear energy development can still thrive if the credits are cut, as he expects the Trump administration will find ways to support the technology. Still, in a perfect world, these credits would remain untouched. 

“We need that protection because the supply chains are not mature,” Pickering said. “We need some big market signals to get American investors, because it’s not just investing in nuclear plants, it’s investing in hundreds of different types of companies to create the long lead time items.” 

The legislative text advanced this week would roll back or amend several other major clean energy and manufacturing tax credits supported by the IRA, including subsidies for electric vehicles and clean hydrogen production.

HOUSE GOP ADVANCES SWEEPING CUTS TO CLEAN ENERGY TAX CREDITS

This is estimated to eliminate $560 billion overall in green subsidies over the next 10 years, according to the JCT. The bill would also expand the clean fuel production credit, which supports biofuel development, by roughly $45 billion. 

Overall, these changes are intended to help offset Republican tax cuts, which include an extension of the 2017 Trump overhaul.