In a political environment that is increasingly polarizing, there isn’t much that Democrats and Republicans fully agree on—but the importance of nuclear energy is one of them.
Our electricity demands are higher now than they’ve ever been and are only going to be increasing with a surge in the use of AI and data centers. The 94 licensed nuclear power reactors in the United States generate almost 20% of the nation’s electricity. Because of financial pressures, 13 U.S. reactors were forced to close between the years of 2013 and 2022, and plans to build several others were put on hold. We’re in a new era now, and demand for nuclear is larger than ever. Tax credits have been critical in helping plants go from struggling to flourishing with power uprates and life extensions and creating a pathway for new nuclear.
In 2022, nuclear energy got a big win with new tax credits. The 45U tax credits are being used to help keep existing U.S. nuclear plants in operation. 45U provides up to 1.5 cents per kilowatt-hour—with the value of the credit decreasing when plant revenues are higher—for electricity generated through. This credit is spurring companies to invest billions of dollars to continue the long-term operation of these plants.
Additionally, the 45Y and 48E tax credits are being used to deploy new nuclear capacity in the U.S., which will bolster our national security interests abroad and help us compete with state-owned enterprises in Russia and China.
But these tax credits may be at risk, which is why it’s important for Congress to protect them.
At NEI's recent Nuclear Financing Summit, participants from across the energy and financial sectors consistently emphasized the importance of these incentives in driving investment and accelerating the deployment of new nuclear technologies. These policies are key to realizing nuclear energy's full potential as a clean, reliable 24/7 power source that strengthens energy security, creates high-quality jobs, and supports the Administration's energy goals.
Countries around the world are seeking to build new nuclear plants in partnerships with established nuclear countries. These are relationships that could last 100 years. If we’re not able to build more nuclear of our own, countries like China or Russia will be the ones building those relationships. The U.S. had fallen behind these countries in international spaces, with Russia involved in nearly 70 percent of the export market and China potentially approving more than 100 domestic reactors in the next 10 years. The tax credits give us a chance to get back on top.
International security isn’t the only reason we need to keep these tax credits; we need them to meet our clean energy goals, to create high-paying jobs, and to make sure we meet rising energy demand.
The nuclear energy sector directly employs over 70,000 workers and is responsible for more than 250,000 jobs across the U.S. economy. These jobs produce careers with wages that are 50% higher than the rest of the power sector, strengthening local economies.
Nuclear tax credits are ensuring America remains an international energy leader —we need to fight for them.
