The Wide Range Of Possibilities For Nuclear Energy

What does the future hold for nuclear and solar energy? Will nuclear struggle to become more relevant with potential capital costs of $26 trillion, or will next-gen reactors make nuclear more competitive than solar power? 

Historically, regulatory hurdles have stifled nuclear’s promise of low-cost, reliable baseload power.¹ Since 2020, a shift in sentiment has reignited the momentum behind nuclear, but will it ever be competitive with renewables like solar? While regulations have increased the cost of nuclear power dramatically during the past 50 years, the cost of solar power has been declining steadily, as shown below. 

Source: ARK Investment Management LLC, 2025, based on data from Lovering et al. 2016; IAEA 2023; EIA 2022; World Nuclear News 2022; and Our World in Data 2023 as of October 2023.² For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.

Even if nuclear costs had continued to fall in line with the trend in place before regulations derailed them in the 1970s, a quick glance would suggest that they still would not be as low today as solar on a cost-per-watt basis, as shown by the dotted purple trendline above. Importantly, however, the first glance misses a key point: nuclear plants operate at more than 80% utilization, while solar plants operate at a capacity utilization rate in the low 20s%. Adjusted for utilization, the playing field shifts, as shown below.

Source: ARK Investment Management LLC, 2025, based on data from Lovering et al. 2016; IAEA 2023; EIA 2022; World Nuclear News 2022; and Our World in Data 2023 as of October 2023.³ For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.

Using assumptions from Tesla’s Master Plan Part 3⁴ as a baseline and holding its solar assumptions constant, ARK has modeled a scenario in which nuclear provides all power except that from solar. Please see the resulting capacity requirements below.

Source: ARK Investment Management LLC, 2025, based on data from Lovering et al. 2016; IAEA 2023; EIA 2022 ; World Nuclear News 2022; Our World in Data 2023; and Tesla 2023 as of October 2023.⁵ For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results. Forecasts are inherently limited and cannot be relied upon.

Our calculations suggest that while solar costs are likely to continue their decline, nuclear costs have the potential to decline at a more rapid rate. Here we propose four possible nuclear cost scenarios, their data incorporated in the chart below: 

1. Step-Change Cost Decline To Pre-1975 Nuclear Cost Trendline:

• A discontinuous drop in costs is possible as new companies like Oklo execute their plans, pushing costs down to their pre-1975 trendline. This cost decline, shown by the red dotted line below, would result in overall capital costs of approximately $3.3 trillion, or $1 trillion on a capacity-adjusted basis.

2. Gradual Cost Decline To Pre-1975 Nuclear Cost Trendline:

• Costs fall gradually to the trend in place before 1975. This cost decline, shown in the navy dotted line below, would result in an overall capital costs of approximately $6.4 trillion, or $1.8 trillion on a capacity adjusted basis. 

3. Initial Cost Overruns, Followed By A Decline To Pre-1975 Nuclear Cost Trendline:

• In line with a Tennessee Valley Authority study,⁶ the first small modular nuclear reactors are more expensive, but costs decline over time to the trend in place before 1975. This cost decline, shown in the orange dotted line below, would result in overall capital costs of approximately $9.3 trillion, or $2.7 trillion on a capacity adjusted basis.

4. Inability To Hit The Pre-1975 Cost-Decline Trendline:

• From today’s levels, costs fall in line with Wright’s Law⁷ and never drop to the trend in place before 1975. This cost decline, as shown in the pink dotted line below, would result in overall capital costs of approximately $26.5 trillion, or $7.6 trillion on a capacity adjusted basis.

Source: ARK Investment Management LLC, 2025, based on data from Lovering et al. 2016; IAEA 2023; EIA 2022 ; World Nuclear News 2022; Our World in Data 2023; and Tesla 2023 as of October 2023.⁸  For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results. Forecasts are inherently limited and cannot be relied upon.

In our view, solar should continue to grow, its costs either declining at a consistent rate, as shown in the dotted green line below, or reverting to their historic cost decline rate, as shown in the dotted purple line below. Based on the slope of the two cost declines, the capital cost to move from current state to the future end state would be approximately $2.9 trillion to $3.4 trillion, respectively.  

According to Tesla, ultimately solar would require 71.4 million acres of land which, according to our research, would add another $700 billion to overall costs.

Source: ARK Investment Management LLC, 2025, based on data from Our World in Data 2023 as of October 2023.⁹ For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.

The future of nuclear energy depends upon costs. If a company were to achieve a discontinuous decline in costs, nuclear power could emerge as the lowest-cost source of electricity. If not, regulatory changes from the 1970s probably have limited its long-term viability.

That said, solar’s land requirement at 71.4 million acres would be a considerable logistical challenge. Because solar development involves complex real estate negotiations and long interconnect times, scaling would be difficult, leaving a place for alternative power sources like nuclear.