Small modular reactors (SMRs) have captured the imagination of investors and policymakers alike. But will they deliver on their promise within the next five years? A recent webinar with Range Fund Holdings' Founder and CEO Tim Rotolo explored the realistic timeline and most promising applications for this transformative technology.

The SMR Promise

Small modular reactors—those producing up to 300 MW of power¹—represent a fundamentally different approach to nuclear energy. Unlike traditional nuclear plants that require sizable land areas, large cooling towers, and remote locations, SMRs are:

• Modular: Manufactured offsite and installed where needed
• Compact: Only a fraction of the size of conventional reactors
• Customizable: Tailored for specific locations and applications
• More Affordable: Factory production could drive down costs significantly over time

The potential is enormous. But as Mr. Rotolo candidly acknowledged during our webinar, the path to commercial deployment is more nuanced than many headlines suggest.

The Five-Year Reality Check

When asked whether any SMRs would be approved and built within the next five years, Mr. Rotolo offered a measured perspective: "I'm not gonna make specific guesses about which ones will be done, but I do think that there are technologies, probably more around the micro reactor space, that could potentially be approved and built within the next five years."

The key distinction here is important: micro reactors (even smaller than SMRs) focused on specific military and industrial applications are more likely to see deployment first.

Where Government Support Matters Most

The U.S. government is placing significant resources behind accelerating SMR development. The Department of Energy has established testing timelines, with four reactors targeted for evaluation before July 4, 2026. The Army has announced significant initiatives to rapidly scale up SMRs and micro reactors for military bases.

This government support extends to solving critical fuel challenges. High-assay low-enriched uranium (HALEU)—required by many advanced reactor designs—has been a bottleneck. The government is now directly providing HALEU to companies like BWX Technologies and Standard Nuclear to accelerate development of TRISO fuel.

The Most Promising Applications

Rather than replacing large baseload power plants in the near term, SMRs and micro reactors are finding their first applications in specialized contexts:

Military Forward Bases

The Army's emphasis on deploying reactors at forward operating bases addresses a critical vulnerability: fuel supply lines. Self-contained nuclear power eliminates dangerous convoy missions and provides reliable electricity in remote locations. The Army announced the Janus Program in October to support next-generation nuclear.

Industrial Power Production

Companies like Dow Chemical are interested in SMRs not for grid power, but for dedicated industrial use. As Tim explained, "the ability to control that and limit the cost and not be exposed to commodity prices, gas prices" makes SMRs attractive for energy-intensive manufacturing.

Eastern European Energy Security

Countries along Russia's border have strong interest in building their own nuclear capacity to achieve energy independence. The U.S. government has signed multiple cross-border trade deals to export SMR technology to Eastern Europe.

The Supply Chain Challenge

One of the biggest hurdles facing SMR deployment is supply chain development. As Mr. Rotolo noted, when discussing companies with established capabilities: "If I was looking at SMRs, companies backed by like Hitachi GE Vernova, they already have a lot of the resources in place to build industrial scale reactors. They have a leg up just because they have more of an established supply chain."

This is why the webinar poll showing SMRs as the top area of interest, while understandable, may miss the bigger picture. As Mr. Rotolo observed, "Actually some of the other areas—energy and national security benefits and reliability—are the areas that really attracted us and got us interested [in nuclear] after the European energy crisis."

The Role of Private Capital

Mr. Rotolo emphasized the importance of private sector innovation over government development: "I definitely don't think the government should be [the innovator], they're just not very good innovators. I would much rather have Scott Nolan from Founders Fund trying to come up with an enrichment technology than pretty much anybody in our government."

The positive development is that because big tech companies require power for AI, they're willing to fund the CapEx. Microsoft's backing of reactor restarts, Google's deal with Duane Arnold for restart, Amazon's support for X-energy—these partnerships bring sophisticated capital and management to nuclear development.

A More Realistic Timeline

Here's what investors could expect:

2025-2026: Testing and approval of select micro reactor designs for military and specialized industrial applications

2026-2028: First commercial deployments of micro reactors; continued large reactor restarts and life extensions

2028-2030+: Broader SMR deployment as supply chains mature and early projects demonstrate viability

The reality is that in the near term, reactor restarts and life extensions will deliver the most new nuclear capacity. As Mr. Rotolo noted, "It's much easier to build something from the brownfield than a totally greenfield project."

Investment Implications

The NUKZ index was designed with this reality in mind. Rather than overweight one unproven technology, it provides exposure across:

• Advanced reactors (capped at 30%)
• Utilities (capped at 30%)
• Construction & services (capped at 35%)
• Fuel (capped at 20%)

This diversification recognizes that the nuclear renaissance will unfold across multiple fronts simultaneously. Companies like Constellation Energy restarting Three Mile Island, Brookfield, Cameco, and Westinghouse developing large AP1000 reactors with backing from the US government, and utilities extending the life of existing plants will deliver nuclear power growth alongside SMR development.

The Bottom Line

SMRs represent a genuinely transformative technology with enormous long-term potential. But realistic investors should expect a gradual rollout focused first on military and industrial applications, not an overnight revolution in grid power generation.

The true nuclear renaissance is bigger than just SMRs—it's an "all of the above" strategy that includes large reactor construction, plant restarts, life extensions, and eventual SMR deployment as technology matures and supply chains develop.

For investors, this means the opportunity extends well beyond speculative SMR plays to include established utilities, construction services, fuel cycle companies, and defense contractors—all of which stand to benefit as nuclear capacity expands through multiple pathways.

Sources:

[1] Small modular reactor definition based on industry standard for reactors producing up to 300 MW, as referenced in World Nuclear Association materials

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