Paragon Energy Solutions: Pioneering the SMR Revolution Through Strategic Partnerships

The global energy landscape is undergoing a paradigm shift, with small modular reactors (SMRs) emerging as a cornerstone of the carbon-free future. At the heart of this transformation is Paragon Energy Solutions, a leader in nuclear safety systems, whose strategic partnerships are redefining supply chains and accelerating the deployment of advanced nuclear technologies. By leveraging its NRC-approved safety systems and collaborative ecosystem, Paragon is positioned to capture a dominant share of the $500 billion SMR market anticipated by 2035.

The Strategic Ecosystem: NuScale and Beyond

Paragon's partnership with NuScale Power, announced in June 2025, exemplifies its pivot toward SMR leadership. Under the agreement, Paragon supplies its Highly Integrated Protection System (HIPS) and CoreVision Neutron Monitoring System to NuScale's VOYGR SMR plants. These systems are critical for ensuring cyber-resilience and operational reliability, addressing two of the largest hurdles in legacy nuclear infrastructure: obsolescence and cybersecurity. HIPS, already NRC-approved, reduces the need for costly retrofits in older plants while enabling scalable SMR designs.

The NuScale collaboration also underscores Paragon's commitment to U.S. supply chain resilience. By manufacturing key components domestically, Paragon aligns with federal initiatives to decarbonize energy while safeguarding national security. This partnership is part of a broader strategy: in Q2 2025, Paragon also signed a landmark deal with Terra Innovatum to integrate its safety systems into the SOLO microreactor, a 1 MWe-5 MWt design targeting industrial and urban markets. Together, these agreements position Paragon as a “go-to” supplier for both established and next-gen reactors.

The Technical Edge: NRC Approval and Cybersecurity

Paragon's success hinges on its ability to meet stringent regulatory standards. The NRC's 2022 integration of cybersecurity into its Reactor Oversight Process (via inspection procedure 71130.10) has elevated safety systems as a critical requirement. Paragon's HIPS platform, co-developed with Rock Creek Innovations (acquired in 2021), meets these demands by offering analog-like reliability with digital diagnostics, reducing operational costs and minimizing cyber vulnerabilities. This dual advantage—proven safety and modern cybersecurity—is a rarity in the industry, giving Paragon a first-mover advantage in SMR markets.

Legacy nuclear facilities, which account for 70% of global reactors, are increasingly adopting Paragon's solutions to modernize control systems without full-scale overhauls. For example, Purdue University's PUR-1 reactor became the first to receive NRC approval for a fully digital safety system in 2019, leveraging Paragon's tech to extend its operational life. Such projects validate Paragon's role in bridging legacy and advanced systems, a $30 billion opportunity by 2030 as utilities seek cost-effective modernization.

Market Momentum: Scaling SMRs and Capturing Value

The SMR market is poised for explosive growth, driven by decarbonization mandates and grid stability demands. Projects like NuScale's Carbon Free Power Project (CFPP) in Idaho—which will deploy the first 12-module VOYGR plant by 2029—rely on Paragon's systems to ensure compliance and safety. Meanwhile, Terra Innovatum's SOLO reactor, designed for data centers and industrial parks, aims to deploy 1GW of capacity by 2030, directly benefiting from Paragon's manufacturing support and NRC-validated tech.

Investors should note Paragon's diversified revenue streams:
- Safety systems sales to SMR developers like NuScale and Terra Innovatum.
- Long-term service contracts for maintenance and upgrades.
- Licensed IP revenue from its HIPS platform, now available to the broader nuclear industry via a 2022 patent agreement.

This model mitigates risks inherent in project-based revenue while capitalizing on recurring demand for safety and cybersecurity solutions.

Investment Thesis: Low-Risk, High-Return Catalysts

Paragon presents a compelling investment opportunity for three reasons:
1. Regulatory Tailwinds: NRC approvals and global decarbonization policies ensure sustained demand for its systems.
2. Diversified Partnerships: Collaboration with NuScale, Terra Innovatum, and others reduces reliance on any single project or market.
3. Scalability: SMRs' modular design allows Paragon to deploy its systems across a spectrum of applications—from microreactors to 1,000+ MWe plants—without incremental R&D costs.

The company's recent proposed business combination with GSR III Acquisition Corp. (announced alongside the Terra deal) underscores its focus on funding growth while accelerating commercialization timelines. With SMR deployment timelines tightening (e.g., Terra's 2028 target), Paragon stands to benefit from both capital gains and operational momentum.

Risks and Considerations

While Paragon's partnerships are robust, risks remain:
- Regulatory Delays: NRC approvals for SMR designs could face setbacks, though Paragon's existing certifications mitigate this.
- Supply Chain Volatility: Global shortages in advanced materials could impact manufacturing timelines. Paragon's U.S.-centric supply chain, however, reduces exposure.
- Market Competition: New entrants may challenge its safety system dominance, but NRC's rigorous certification process creates high barriers to entry.

Conclusion: A Cornerstone of the Nuclear Renaissance

Paragon Energy Solutions is not merely a supplier—it's an enabler of the SMR revolution. By partnering with industry leaders like NuScale and Terra Innovatum, it is redefining nuclear energy's safety, scalability, and cybersecurity. With NRC-approved tech, a diversified revenue model, and a focus on legacy system modernization, Paragon offers investors a rare blend of growth potential and regulatory certainty. As the world transitions to carbon-free energy, Paragon's role as a critical link in the SMR supply chain makes it a top pick for portfolios seeking exposure to the next energy paradigm.