⚡ Washington and the New Energy Revolution: How's it going?

'Meh' for nuclear. 'Yikes' for fusion and geothermal

May 30, 2025

My fellow pro-growth/progress/abundance Up Wingers,

Is America's advanced-energy future potentially better off than a week ago? For nuclear power, the (still) preliminary answer is a guarded “yes.” For fusion and geothermal, the picture darkens a bit. The mixed signals from Congress and the White House illustrate why economists pine for simple carbon taxes as markets make do with messy and uncertain political compromises.

On May 22, the House passed the "One Big Beautiful Bill Act" (cringe) budget-reconciliation bill, which would quickly end most of the big tax credits for clean energy contained in the Inflation Reduction Act. Yet the bill gives nuclear energy a break compared to solar and wind. While most projects lose tax credits if they don’t start soon, new nuclear plants have until 2029 to begin construction. Existing nuclear plants keep their full tax credits until 2031. Plus, nuclear projects can still sell their tax credits, making it easier to raise capital.

In JPMorgan’s analysis of the bill, the megabank’s analysts called the cuts to clean-energy incentives “draconian,” adding that “all eyes now turn to the Senate where bulls remain hopeful that positive revisions will be made. … [But] we believe investors should generally proceed with caution given recent publicly-expressed support from House Republicans as well that ultimately voted for the draconian cuts.”

Here’s a granular rundown from Goldman Sachs:

1. Latest revised bill was worse than expected for solar stocks. Data available on request.

Then the next day, President Trump signed four executive order designed to accelerate and expand the build-out of next-generation nuclear technologies. The orders are meant to a) streamline regulations, b) reform the Nuclear Regulatory Commission, c) provide funding for reactor construction and upgrades, d) deploy advanced nuclear technology at military facilities, and e) strengthen domestic fuel supply chains to restore America's nuclear leadership.

Goldman: “We anticipate these actions to be largely beneficial to the domestic build out of larger nuclear reactors as well as an acceleration of SMR technology.”

The stock market reaction that day supports a positive take on the impact of the order, via the The Wall Street Journal:

Shares of nuclear power companies soared Friday. Nano Nuclear Energy rose 30%, and NuScale Power climbed 19%. Oklo—which went public in 2024 through OpenAI Chief Executive Sam Altman’s special-purpose acquisition company AltC—jumped 23%. Energy Secretary Chris Wright was a board member before joining the administration. Nuclear fuel supplier Centrus Energy rose 21%. Uranium miner Cameco, which owns part of the reactor company Westinghouse, rose 11%. Equipment provider GE Vernova was up 1%, while Constellation Energy, the largest generator of U.S. nuclear power, rose about 2%.

Where things stand

So the new state of play seems to be a) the executive order seem to be largely good news for nuclear, b) the House reconciliation bill is not great but could have been worse, and c) strong optimism the bill will improve in the Senate.

All that said, the Department of Energy's loan programs face an especially bizarre threat. The House bill eliminates certain Inflation Reduction Act credit subsidies while maintaining loan authority — potentially creating zombie programs with lending power but no money for staff or operations. Remember: Energy Secretary Chris Wright called the Loan Programs Office "the most efficient tool" for supporting early-stage technologies, urging preservation of full funding.

Indeed, if you want to be bearish, there’s reason to do so, as outlined in an email to me from power-systems expert Tyler Norris:

In blunt terms, when it comes to building new reactors, the US nuclear industry is dead without the support of the Investment Tax Credit and the Loan Programs Office. I attempted to articulate this as clearly as I could in testimony to the US House Energy and Commerce Committee in March:
Rep. Menendez (NJ-8): How disruptive would the repeal of the IRA be to the long term investments currently underway across the country to increase our access to reliable and affordable electricity?
Norris: I want to highlight one resource in particular, which is nuclear power. It’s unequivocal – it’s a resource that is still above cost. Georgia did a great service, in some sense, by paying above market for those two reactors at Vogtle, but there still has to be some cost premium paid to get those resources online. They’re heavily reliant on federal subsidies and incentives. So if there is a repeal of the IRA tech neutral tax credits for nuclear, or any impact on the Loan Programs Office, there will not be a nuclear renaissance in the United States – and similar principles apply to enhanced geothermal and other possible clean firm sources in the future.
This cost premium is illustrated by the US Department of Energy’s nuclear liftoff report (2024 update), which estimated the {Levelized Cost of Energy] of new US nuclear at $186/MWh adjusted for recent inflation and interest rates.
One of the country’s most pro-nuclear electric utilities, Duke Energy, echoed the same point in a March 2025 filing with the NC Utilities Commission, stating that “Federal support will be required in the form of continued tax credits for new and existing nuclear generation and cost-overrun protection... It is essential that the current tax credits that incentivize new nuclear generation remain in place, as they provide critical financial support for these investments, reducing costs for customers and decreasing investment risk.”
An executive order directing [Loan Programs Office] to back 10 new reactors sounds bold on paper, but it’s largely hollow if the same administration is gutting LPO’s capacity, accelerating the phaseout of the nuclear ITC, driving up equipment costs with tariffs, and pushing interest rates higher. The House reconciliation bill effectively offsets, if not outright cancels, any of the limited help offered by the executive orders. Without meaningful, stable federal financial support, the economics of new nuclear in the US simply doesn’t pencil.

Bad news for emerging energy technology

Fusion and advanced geothermal face a grimmer outlook, at least according to the industry sources I exchanged emails with, who make a common complaint: Washington's energy policy rewards lobbying muscle over technological promise. Both sectors potentially offer clean baseload power — reliable, carbon-free electricity around the clock — yet find themselves shut out while less transformative technologies enjoy favor. Nuclear, blessed with decades of Washington relationships, secured generous exemptions from punitive construction deadlines. Meanwhile, fusion and geothermal face impossible timelines and vanishing incentives.

One fusion industry, speaking on background, called the reconciliation bill "bad for fusion," noting it "does nothing to support the domestic manufacturing of fusion components." What’s more, the executive orders offer fusion no relief. "We don't need regulatory relief or special dispensation to build fusion power plants," the executive explained. "The hold up for fusion is science and engineering, which can be accelerated by capital. … [Also] DOGE’s internal mess is impacting both decision making at DOE and NRC, slowing the process for doing the real work of moving fusion forward.

This patchwork approach — subsidizing some technologies while abandoning others — represents second-best policy at its most arbitrary. A carbon tax would let markets efficiently allocate capital across all clean energy options.

Instead, America's energy future depends on which lobbyists write the best exemptions, and which technologies better align with hot-take political narratives about energy security and jobs. If we’re going the subsidy route — the Shale Revolution seems to be a good case study for when government gets it right — Washington needs to do way better, especially for emerging tech such as fusion and geothermal.

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