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Court reinstates $7 billion 'Solar for All' program cut by EPA

Court reinstates $7 billion 'Solar for All' program cut by EPA

Rule Changes

Rhode Island judge rules EPA illegally canceled Inflation Reduction Act solar grants

Today: Judge rules EPA termination unlawful

Overview

Updated 1 hour ago

A federal judge on Friday ordered the Environmental Protection Agency to reinstate the $7 billion Solar for All program, ruling that the agency unlawfully canceled grants already committed to states, tribes, and nonprofits. The program, funded by the 2022 Inflation Reduction Act, was built to bring rooftop solar to more than 900,000 low-income households.

Judge Mary McElroy of Rhode Island District Court found that Congress, when it repealed the program's authority in July 2025, intended to reclaim only unspent funds, not the billions already obligated to 60 grant recipients. The ruling vacates the EPA's termination and restores access to the funds.

Why it matters

If the ruling holds, about 900,000 low-income households keep access to subsidized rooftop solar, and the programs administering those grants stay funded.

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Key Indicators

$7 billion
Total Solar for All grant funding
Awarded to 60 recipients in April 2024 under the Inflation Reduction Act.
900,000+
Households the program was designed to serve
EPA's estimate of low- and moderate-income families intended to benefit.
93%
Share of grant funds EPA deobligated
EPA cut all but 7 percent of obligated balances in August 2025.
60
Grant recipients
States, municipalities, tribes, and nonprofits selected in April 2024.
23
State and DC governmental bodies in the lawsuit
22 states plus the District of Columbia joined as plaintiffs.

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People Involved

Organizations Involved

Timeline

August 2022 September 2026

6 events Latest: Today
Tap a bar to jump to that date
  1. EPA cancels existing Solar for All grants

    Agency Action

    EPA terminates existing Solar for All grants, deobligates 93 percent of funds.

  2. One Big Beautiful Bill Act repeals program authority

    Legislation

    One Big Beautiful Bill Act signed; repeals Section 134 and rescinds unobligated balances.

  3. EPA launches Solar for All

    Program Launch

    EPA creates Solar for All, awards $7 billion to 60 states, tribes, and nonprofits.

  4. Inflation Reduction Act creates solar grant authority

    Legislation

    Inflation Reduction Act signed, creating Greenhouse Gas Reduction Fund under Clean Air Act Section 134.

Scenarios

1

EPA reinstates Solar for All; rooftop solar programs resume

Likely Resolves by Jan 15, 2027

Discussed by: Southern Environmental Law Center and other plaintiff counsel

The EPA complies with the court's order, restores obligated funds to recipients, and allows state, tribal, and nonprofit programs to resume. Awardees begin disbursing grants for rooftop solar installations for low-income households.

2

EPA appeals to First Circuit; funding stays frozen

Possible Resolves by Dec 15, 2026

Discussed by: Federal Rules of Appellate Procedure (60-day appeal window)

The EPA files a notice of appeal within 60 days. If the First Circuit grants a stay pending appeal, grant balances remain frozen while the case proceeds. An appellate ruling could take a year or more, leaving recipients without access to funds in the meantime.

3

Congress passes new law terminating Solar for All outright

Unlikely Resolves by Jun 1, 2027

Discussed by: Washington Examiner and congressional observers

Congress passes new legislation explicitly canceling obligated Solar for All funds rather than leaving termination to the EPA. A new law would supersede the court's reinstatement order, though it would face the same political constraints that shaped the initial repeal.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

1972-1975

Nixon's impoundment fights (1972-1975)

President Richard Nixon refused to spend billions in funds Congress had appropriated for housing, environmental, and other programs he opposed. He argued the president had inherent authority to withhold spending. The Supreme Court ruled against the administration in Train v. City of New York (1975).

Then

The Court held that the EPA administrator couldn't withhold funds Congress had appropriated under the Federal Water Pollution Control Act.

Now

Congress passed the Impoundment Control Act of 1974, requiring presidents to get congressional approval to cancel appropriations. The principle that the executive can't unilaterally refuse to spend appropriated funds has held since.

Why this matters now

Solar for All tests the same boundary: whether an agency can cancel grants Congress has already obligated, when Congress rescinded only unspent balances.

January-February 2025

Federal funding freeze litigation (2025)

The White House ordered a government-wide freeze on federal grant and loan disbursements in January 2025. Federal judges in multiple cases blocked the freeze, holding that agencies can't halt spending Congress has appropriated.

Then

Courts issued temporary restraining orders and the freeze was lifted within weeks.

Now

The litigation established a pattern of courts intervening when the executive attempts to impound appropriated funds across agencies.

Why this matters now

Solar for All is a targeted sequel to that fight, now resolved against the same administration in court.

Sources

(8)