Court Orders EPA to Restore $7 Billion in Solar for All Funding
A federal judge in Rhode Island ruled that the Environmental Protection Agency unlawfully terminated the Solar for All program, which had allocated $7 billion in grants for clean energy projects in disadvantaged communities. The judge, a Trump appointee, said the agency lacked statutory authority to cancel the already obligated funds. The ruling requires the EPA to release the money, according to attorneys involved in the case.
The ruling hinges on the legal distinction between obligated and unobligated funds. While Congress's One Big Beautiful Bill Act in 2025 repealed unobligated climate funding, the court determined the Solar for All grants were already committed when awarded in 2024. The EPA had projected the program would save households $350 million annually on electricity bills and support 200,000 jobs and training opportunities.
The lawsuit was brought by downstream beneficiaries rather than direct grant recipients, including solar companies that invested in personnel and equipment based on expected funding, a labor union involved in Rhode Island's implementation plan, and a nonprofit receiving a sub-award from Indiana's grant. A Florida coalition of nonprofits had been allocated $156.1 million for low-income solar programs. Grant recipients and state recipients filed separate subsequent challenges.
This ruling could restore billions in funding for clean energy projects serving low-income communities, potentially lowering electricity costs for disadvantaged households and preserving solar-related jobs and training programs. However, the EPA's stated intention to appeal means the outcome remains uncertain. If the decision stands, it may establish a precedent limiting executive authority to cancel congressionally appropriated funds, affecting how future administrations handle obligated federal spending. Communities that planned solar initiatives around this funding may face continued delays while litigation proceeds.