Economic Impact of H.R.1 Tax Credit Requirements on Existing and New Nuclear Projects
Good Energy Collective has completed a comprehensive analysis of the House-passed version of H.R.1, examining how proposed changes to tax credit eligibility for uprate and new advanced nuclear projects would impact America's nuclear energy sector. H.R.1 maintains nuclear project eligibility for the 45Y tax credits but introduces two critical restrictions: Foreign Entity of Concern (FEOC) "material assistance" requirements and accelerated construction deadlines that create severe barriers for nuclear projects. Our analysis uses real project data from six planned nuclear uprates and nine advanced reactor projects to quantify the economic consequences of these restrictions. The findings reveal costs far exceeding fiscal benefits, with implications for American nuclear development and energy security.
Key Findings
Economic Disruption: H.R.1's component-level "material assistance" restrictions and 2028 construction deadlines would eliminate $11 billion – $19 billion in direct project economic losses across existing reactor uprates and new advanced nuclear projects. This represents $2.4 – $4.3 in economic losses for every $1 in projected fiscal savings.
Federal Revenue Losses: The restrictions would reduce federal tax revenues by $2.7 billion – $4.6 billion over 10 years through lost corporate income taxes and employment taxes—representing 63%–107% of the $4.3 billion in projected tax credit savings, effectively eliminating most or all of the intended fiscal benefits.
Employment Impact: Nearly 10,600 – 19,000 jobs would be eliminated or foregone, including 2,642–4,748 direct nuclear positions, representing $5.7 billion – $9.6 billion in foregone labor income. These losses concentrate in rural communities where nuclear facilities serve as primary economic anchors.
Geographic Concentration: Economic impacts affect specific states with long-standing nuclear investments or planned projects—Georgia, Idaho, Kansas, Michigan, New Jersey, Ohio, Tennessee, Texas, Washington, and Wyoming.
Fiscal Savings vs. Economic Costs
The analysis reveals a stark imbalance between modest fiscal savings and substantial economic costs. H.R.1's nuclear restrictions eliminate far more economic value than they generate in federal savings. The component-level "material assistance" standard proves unworkable for nuclear projects relying on specialized global supply chains, while 2028 construction deadlines conflict fundamentally with nuclear development timelines requiring 5–10 years from design through construction start.
Against $4.3 billion in estimated federal tax credit savings from nuclear restrictions, the analysis projects $11 billion – $19 billion in direct economic losses, $2.7 billion – $4.6 billion in reduced federal tax revenues.
These restrictions directly undermine Administration goals to quadruple nuclear capacity by preventing both critical uprates at existing facilities and advanced reactor demonstrations essential for American nuclear technology leadership. Without these projects, achieving 400 GW of nuclear expansion becomes impossible within required timeframes.
Two targeted modifications would preserve economic value while maintaining security objectives: replace component-level restrictions with entity-level FEOC requirements for nuclear projects, and revert construction deadlines to December 31, 2032. These surgical fixes would eliminate disproportionate economic disruption while supporting strategic energy expansion objectives.
Read the Impact Brief.
Read the White Paper.
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