Small Modular Reactors Are the Future of Nuclear Power; New Report Recommends Policy Shift for Energy Department

WASHINGTON—The only realistic way to significantly scale up nuclear power in the U.S. energy mix is through small modular reactors (SMRs), according to a new report from the Information Technology and Innovation Foundation (ITIF)—the world’s leading science and tech policy think tank—which underscores the urgent need to accelerate deployment before rivals like China and Russia dominate the global market.

“We’re at a critical juncture. SMRs have the potential to do what large reactors never could: achieve cost parity and scale,” said Robin Gaster, research director at ITIF’s Center for Clean Energy Innovation and author of the report. “But potential isn’t enough. Without a focused push that includes clear regulatory pathways, smarter public-private partnerships, and bold federal investment, the U.S. will cede this market to geopolitical competitors who are moving faster and thinking bigger.”

Unlike traditional large-scale reactors, SMRs are designed for modular, factory-based production—cutting costs, accelerating timelines, and allowing for deployment across a wide range of applications. Their flexibility opens the door to serve numerous markets, from industrial applications to military bases, and their 24/7 reliability makes them especially attractive to data centers hungry for firm, clean energy.

Importantly, SMRs offer the prospect of reaching price and performance parity (P3) with fossil fuels—something large reactors have failed to do. By standardizing reactor designs and scaling up production, SMRs could replicate the cost declines seen in other technologies like solar energy. This cost competitiveness is critical to ensuring global adoption, especially in low-income countries where paying a premium forclean energy isn’t feasible.

Big Tech companies have already taken notice. Amazon, Google, and Microsoft are investing in SMR ventures to meet the soaring power demands of their AI data centers. With interconnection delays and grid constraints mounting, SMRs could provide dedicated, behind-the-meter solutions that avoid the bottlenecks of traditional energy infrastructure.

To help SMRs scale and compete globally, the report outlines several key steps policymakers should take:

• Expand funding for early-stage research and development, particularly through the Advanced Reactor Demonstration Program (ARDP) and the U.S. Department of Energy’s (DOE’s) GenIII+ program.
• Increase support for testing, certification, and prototype development, ensuring companies have access to National Lab facilities for validation and regulatory preparation.
• Prioritize first-of-a-kind deployment funding through DOE’s Office of Clean Energy Demonstrations (OCED), with a focus on technologies that can realistically reach price and performance parity.
• Reform and refocus the DOE Loan Program Office (LPO) to concentrate on helping scale up SMR technologies, avoiding projects without a viable path to commercial competitiveness.
• Streamline and modernize Nuclear Regulatory Commission (NRC) processes to support innovation, including allowing for iterative design improvements and faster certification of factory-built components.
• Advance National Environmental Policy Act (NEPA) reform to reduce unnecessary permitting delays that currently hinder nuclear infrastructure projects.
• Coordinate international regulatory standards with key allies to enable U.S. SMRs to compete in global markets.
• Explore alternative financing models—such as Contracts for Difference (CfD), vertically integrated consortia, and risk-tiered loan structures—to better manage early deployment risk.

“If the United States intends to lead in nuclear energy, we must commit decisively to small modular reactors now,” said Gaster. “Any delay risks ceding not only energy innovation but economic and geopolitical leadership to global competitors. The clock is ticking—and China and Russia aren't waiting.”

Contact: Austin Slater, [email protected]