Courts ruled EPA's $7 billion Solar for All cancellation unlawful, but grantees still wait for money

Two federal judges ruled in September that the Environmental Protection Agency unlawfully ended Solar for All, a $7 billion program for low-income households, but EPA has not said whether it will appeal and grantees are still waiting for money.

Solar for All was a competitive grant program created by the 2022 Inflation Reduction Act to help low-income and disadvantaged communities install rooftop and community solar. Its grantees include states, tribes, cities and nonprofit lenders. Nonprofit Quarterly returned to the case on October 19 with a profile of the coalition of unions, advocates and nonprofits behind the Rhode Island lawsuit.

What did the courts decide?

Both courts set aside, or vacated, EPA's decision to end the program. On September 18, Judge Mary S. McElroy of the U.S. District Court for the District of Rhode Island ruled that the termination was "contrary to law and in excess of its statutory authority," writing that "Congress's clear intent was that EPA continue to administer the already obligated SFA grants."

On September 22, Judge Tanya S. Chutkan of the U.S. District Court for the District of Columbia reached the same result in a suit by Harris County, Texas, which had been awarded a $249.7 million grant. She agreed with the county that the decision was arbitrary and capricious, contrary to law and beyond EPA's statutory authority.

When and why did EPA end the program?

EPA terminated Solar for All on August 7, 2025, both opinions say. That was about a month after the One Big Beautiful Bill Act, signed July 4, 2025, repealed the program's section of the Clean Air Act and rescinded its unobligated funds. Administrator Lee Zeldin posted that day that EPA "no longer has the statutory authority to administer the program or the appropriated funds to keep this boondoggle alive."

The courts noted that EPA had obligated the entire $7 billion before a September 30, 2024, deadline, so there was nothing unobligated to rescind. The Sabin Center for Climate Change Law at Columbia counts 60 grantees.

Who brought the cases?

The Rhode Island plaintiffs were not grantees but people and groups downstream of the grants, the court said. They include the Rhode Island AFL-CIO; the Rhode Island Center for Justice, a nonprofit that advocates for low-income households; Solar United Neighbors, a national nonprofit awarded nearly $14 million in subgrants; Black Sun Light Sustainability, a nonprofit that won a subaward of nearly $30 million from Indiana's grantee; three solar companies; and an individual who had applied for roofing and solar work under Georgia's program. Harris County sued as a direct grantee.

Nonprofit Quarterly reported that Capital Good Fund, a nonprofit lender, received $156 million in 2024 as lead applicant for Georgia's program, Georgia BRIGHT Communities, which paused its Solar for All work after the termination.

Are grantees getting their money back?

Not yet, as far as public reporting shows. Neither court ordered EPA to pay out or reinstate individual grants; both judges declined to issue injunctions and relied on vacatur. Judge Chutkan noted that EPA had said undisbursed funds will stay in a Treasury account through September 30, 2031, and had paused closing out grants while the case was pending. She wrote that if EPA proceeds with closeout on the ground that the 2025 law requires it, the court will consider further relief.

Inclusive Prosperity Capital, a nonprofit awarded $249.3 million, told Utility Dive on October 1 that it contacts EPA weekly without a response, does not know when funding will flow and has cut staff. Arizona had received $42,000 of its $156.1 million grant, Cronkite News reported the same day.

Will EPA appeal?

EPA has not said. A spokesperson told Utility Dive the agency is "reviewing the decision and considering options for appeal," and CourtListener's copies of both dockets showed no notice of appeal as of October 20. When the federal government is a party, it generally has 60 days after judgment to appeal, which runs to mid-November for the Rhode Island ruling.

Other fights continue. A case brought by states in federal court in Washington state was dismissed in June on the ground that the claims belong in the Court of Federal Claims, which hears money claims against the government. Grantees including a coalition led by the Maryland Clean Energy Center, the Center for Rural Affairs, Growth Opportunity Partners, the Clean Energy Fund of Texas and Inclusive Prosperity Capital have sued there for damages; Arizona's trial is set for August 2027, Cronkite News reported.

What other nonprofit grantees can take from it

In our view, the rulings turned on one fact, that the money had already been obligated, which is why grantees should keep a dated record of award notices, amendments and agency correspondence. Our earlier pieces on pocket rescissions and on government funding disruptions show how common these breaks have become. This is general information, not legal advice.