The modular design allows SMRs to be prefabricated in pieces at NuScale’s plant and transported for assembly on-site. The exciting technology could potentially reduce costs and the time it takes to become operational, which is a big reason it has such broad appeal.

With that said, this technology is still under development, and it may be years before it is ever deployed on a commercial scale. Regulators have approved NuScale’s 50 megawatts of electricity (MWe) reactor. However, for its SMRs to be more cost-effective, NuScale had to scale up its reactors to 77 MWe. The company expects its larger SMR to be approved by July 2025. However, full certification is still projected to take another couple of years after that.

One problem with SMRs right now is that they appear cheap at first, but cost overruns have made them unrealistic for the time being. For example, the Utah Associated Municipal Power System (UAMPS) terminated a 2015 agreement with NuScale last year.

As part of the agreement, NuScale was going to construct 12 reactor modules to generate up to 600 MWe and was initially planned to be up and running by 2023. At first, the project was expected to cost around $3 billion. These estimated costs rose to $6.1 billion in 2023 and $9.3 billion in 2023, and finally, the project was too expensive for UAMPS to pursue further.

Last year, NuScale agreed with Standard Power to develop two facilities in Ohio and Pennsylvania powered by its SMR technology. The plan is to build 24 units of its 77 MWe modules, producing 1,848 MWe energy from both sites. Standard Power thinks this facility could be operational by 2029 at the earliest.

NuScale is the only company currently with an SDA for its small modular reactor from the NRC, which gives it a first-mover advantage. However, the company still needs its larger design to be approved by the commission, and even then, there are still several steps to go before it begins commercial operations.

NuScale is a story-driven stock today, where investor sentiment will drive the stock based on its accomplishments (or setbacks) along with the broader narrative around nuclear energy. However, much work remains before SMR technology is proven and operational, so most investors are best off watching NuScale from the sidelines for now.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Courtney Carlsen has positions in Microsoft. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool recommends Constellation Energy, Dominion Energy, and NuScale Power and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Is NuScale Power Stock a Buy? was originally published by The Motley Fool