The Department of Energy announced in May 2025 that it had selected eight companies to share more than $94 million in federal funding, all of it aimed at clearing the regulatory, engineering, and supply-chain obstacles that have kept small modular nuclear reactors from reaching commercial operation in the United States. The awards, made through the Generation III+ SMR Pathway to Deployment Program, mark the second wave of federal investment in a broader $900 million initiative that has already committed $800 million to two flagship projects.
For utilities facing surging electricity demand and pressure to retire fossil-fuel plants, the funding represents Washington’s clearest signal yet that smaller, factory-built reactors are no longer a research curiosity. They are a policy priority with real money behind them.
Who received the funding
The $94 million in Tier 2 awards went to eight companies selected from a competitive applicant pool. According to the DOE’s official announcement, the recipients include Kairos Power, Westinghouse Electric Company, BWX Technologies, Natura Resources, Elementl Power, Blue Energy, Acceleron, and Southern Nuclear. Each company is working on a light-water or advanced reactor design that DOE believes can realistically reach commercial deployment within the next decade.
The DOE has not disclosed the exact dollar amount each company will receive or the private-sector cost-share each must contribute. What is known is that the program requires cost-sharing, meaning companies must invest their own capital alongside federal dollars. That structure is designed to ensure that public money flows to projects with genuine commercial backing, not purely speculative concepts.
These Tier 2 selections follow two much larger Tier 1 awards made earlier under the same program. The Tennessee Valley Authority received up to $400 million for its Clinch River project in Oak Ridge, Tennessee, which would deploy GE Hitachi’s BWRX-300 reactor. Holtec International received up to $400 million for its SMR-300 project at the Palisades site in Covert, Michigan, where the company is also working to restart the existing conventional reactor. Both Tier 1 projects are further along in development and target initial operation in the early 2030s.
Why the two-tier structure matters
The gap between Tier 1 and Tier 2 funding is stark. TVA and Holtec each received roughly four times the entire Tier 2 pool. That disparity is intentional. Tier 1 concentrated large sums on two projects closest to breaking ground, covering detailed engineering, site-specific environmental analyses, and early procurement of long-lead components like reactor pressure vessels that can take years to manufacture.
Tier 2 takes a different approach: spread smaller awards across more companies to advance licensing work, qualify domestic suppliers, and prepare multiple sites simultaneously. The logic is a hedge. If only one or two reactor designs succeed, the entire program depends on a single vendor and a single location. By backing eight additional companies, DOE reduces the risk that a regulatory delay, financing shortfall, or engineering setback at one project derails the broader push for new nuclear capacity.
The total program funding of $900 million is outlined on the DOE Office of Nuclear Energy’s program overview page, with the formal funding opportunity announcement (DE-FOA-0003485) available through the federal grants portal.
What small modular reactors actually are
A conventional nuclear power plant generates roughly 1,000 megawatts of electricity, enough to power about 750,000 homes. The reactor vessel alone can stand several stories tall and weigh hundreds of tons, requiring years of on-site construction. Small modular reactors, by contrast, are designed to produce up to 300 megawatts each. Their components are small enough to be manufactured in factories and shipped by truck or rail to a project site, where they can be assembled in a fraction of the time.
That factory-built approach is the core promise of SMRs: lower upfront capital costs, shorter construction schedules, and the ability to add capacity incrementally by installing multiple modules at a single site. Proponents argue that SMRs could fit on retired coal plant properties, reusing existing grid connections and cooling infrastructure. For communities that lost jobs when coal plants closed, an SMR project could mean new employment without new transmission lines.
But the promise has been slow to materialize. The most prominent U.S. SMR effort before this program, the Carbon Free Power Project led by NuScale Power at Idaho National Laboratory, was canceled in late 2023 after costs escalated and key utility customers withdrew. NuScale’s design did earn the first-ever NRC certification for a small modular reactor in January 2023, proving the technology could clear the regulatory bar. The project’s collapse, however, demonstrated that technical approval alone does not guarantee commercial viability. Rising construction cost estimates and uncertain power purchase agreements proved fatal.
The bottlenecks this funding targets
The DOE structured the Tier 2 awards to address three specific obstacles that have historically slowed reactor deployments.
Licensing timelines. The Nuclear Regulatory Commission’s review process for new reactor designs can take years. Companies must submit detailed safety analysis reports, environmental impact assessments, and emergency planning documents before receiving a construction permit, let alone an operating license. The Tier 2 funding is intended to help companies prepare and submit those packages faster, covering the cost of engineering analyses and technical consultations that smaller firms might otherwise struggle to afford.
Supply-chain gaps. The United States currently lacks sufficient domestic manufacturing capacity for several critical reactor components, including specialized steel forgings, control rod assemblies, and nuclear-grade instrumentation. The Energy Information Administration has documented these constraints in its assessments of the advanced nuclear sector. Tier 2 money can help companies qualify domestic suppliers, fund prototype component fabrication, and reduce dependence on foreign manufacturers for parts that require long lead times.
Site preparation. Even after a reactor design is licensed, the physical site must be characterized, permitted, and prepared for construction. That includes geotechnical surveys, environmental reviews, cooling water assessments, and grid interconnection studies. For companies eyeing retired coal plant sites or other brownfield locations, Tier 2 funding can accelerate the site-specific work that must be completed before construction crews arrive.
No NRC docket numbers or specific licensing milestone dates have been publicly tied to the Tier 2 awards as of June 2025. Until those connections become clear, it is difficult to judge exactly how quickly federal dollars will translate into construction permits or operating licenses.
What could still go wrong
Federal funding reduces risk, but it does not eliminate it. The NuScale experience showed that even a fully certified reactor design can fail commercially if construction costs climb faster than projected revenues. Several factors could complicate the Tier 2 portfolio.
Utility commitment remains thin. Many power companies are exploring SMRs as a potential replacement for retiring coal plants and a complement to wind and solar, but few have signed binding contracts to purchase electricity from specific reactor projects. Without firm power purchase agreements, developers may struggle to secure the private financing needed to move from engineering studies to actual construction.
The scale of Tier 2 funding is modest relative to the cost of building a reactor. A single SMR project can carry a total price tag in the billions of dollars. Whether $94 million split among eight companies can meaningfully accelerate timelines depends on how precisely the money targets discrete bottlenecks rather than spreading too thin across broad development activities.
Political and regulatory uncertainty also looms. Federal energy priorities can shift with administrations, and state-level permitting requirements add another layer of complexity. Local opposition to nuclear projects, while less intense for SMRs than for large plants, has not disappeared. Communities near proposed sites will want answers about safety, waste storage, and economic benefits before construction begins.
Where this leaves the U.S. nuclear industry
The Generation III+ SMR Pathway to Deployment Program now has $894 million committed across 10 projects spanning two tiers. That makes it one of the largest federal investments in new nuclear construction since the loan guarantee programs of the early 2010s, which helped finance the Vogtle expansion in Georgia, the only new conventional reactors built in the United States in decades.
The next milestones to watch are concrete ones: NRC application submissions from Tier 2 companies, construction permit reviews, and utility announcements of power purchase agreements tied to specific SMR projects. Until those events occur, the $94 million in Tier 2 awards is best understood as a down payment on a technology that Washington believes is essential to meeting future electricity demand with carbon-free power, but that has not yet proven it can be built on time and on budget in the American market.
Other countries are not waiting. Canada’s Ontario Power Generation is building a BWRX-300 at the Darlington site, with construction already underway. The United Kingdom has launched its own SMR competition, selecting Rolls-Royce SMR for a first-of-a-kind project. If U.S. developers fall behind international peers, the economic and strategic benefits of domestic SMR manufacturing could migrate overseas, along with the jobs and intellectual property that come with them.
For now, the DOE’s $94 million bet on eight companies is a calculated wager that spreading federal support across a broader portfolio will produce at least a few winners. Whether that wager pays off will depend less on the size of the checks and more on whether the companies that cashed them can navigate the licensing, financing, and construction challenges that have tripped up every American nuclear project in recent memory.
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*This article was researched with the help of AI, with human editors creating the final content.
