Workers install solar panels on the National Institute of Standards and Technology’s (NIST) Net-Zero Energy Residential Test Facility in Gaithersburg, Md. Solar for All, a federally funded program to provide rooftop and community solar to low-income residents, is on hold after President Donald Trump declared a freeze on funding climate-related projects and other spending. (Photo courtesy of NIST)
The U.S. Environmental Protection Agency’s $7 billion Solar For All Program faces an uncertain fate following last week’s rollout of executive orders from President Donald Trump putting a freeze on federal financial assistance.
That news came a month after EPA officials from the previous administration told Floodlight that awards tied to the program had already been obligated to nonprofit groups and states and would start trickling down to low-income property owners at the beginning of this year.
But that’s not how it’s rolling out for Solar for All, which is designed to offer solar power to households in low-income and disadvantaged communities through grants and loans to help ease annual utility costs and meet climate goals.
Sean Gallagher, senior vice president of policy for the Solar Energy Industries Association, confirmed news reports that Solar for All grant recipients received notice from the federal Office of Management and Budget that funding was put on pause with no indication when or if they might receive it. One Solar for All grant recipient set to receive hundreds of millions of dollars confirmed the funding portal to request reimbursement was shut down.
GET THE MORNING HEADLINES.
Participants in the program — part of then-President Joe Biden’s Inflation Reduction Act — are now scrambling to figure out how to access the money approved by Congress before Trump took office.
Officials with GRID Alternatives — a nonprofit awarded $357 million to add solar panels on homes in 29 states plus Native American households in five states — said the group received form emails announcing the pause of funding for Solar For All. The emails came from federal agencies but not the EPA, which administers the program, Wanda Heard, senior public relations and advocacy manager for GRID Alternatives, said in a prepared statement.
“We understand that all awardees’ ability to draw funds has been ‘suspended,’ but direct communication has been limited,” Heard wrote.
Heard said her organization is worried about not being reimbursed by the EPA “promptly” or “at all,” making it hesitant to begin any solar projects.
One of Trump’s executive orders, Unleashing American Energy, orders federal agencies to halt climate-related funding under the IRA and the Bipartisan Infrastructure Law — which Trump labels as the “Green New Deal” — while officials analyze whether they conflict with the president’s order to maximize U.S. fossil fuel development.
Last week, his administration released an Office of Management and Budget memo directing agencies to halt all “financial assistance” from the federal government, except assistance to individuals.
Some states and nonprofits responded quickly by suing the Trump administration over the pause. And a federal district court judge issued an administrative stay the day after the freeze memo. OMB withdrew the memo, but the White House said the funding freeze would remain in place.
On Monday, U.S. District Judge Loren L. AliKhan extended her order as nonprofits argued the freeze is illegal and unconstitutional, and the halt in funding could force them to shut down while the case is being litigated.
A second judge in Rhode Island made a similar ruling in a separate case in which 22 attorney generals from Democratic states sued over the freeze. Both claim the administration is violating the Administrative Procedure Act.
It’s unclear what that means for Solar for All, Gallagher said, adding, “We are working to learn more about when or if disbursements will resume.”
Optimism turns to alarm
Similar sentiments were shared by state leaders in New Mexico.
“The governor and her cabinet secretaries are thoroughly reviewing these orders and their implications for our state,” Michael Coleman, spokesperson for New Mexico Gov. Michelle Lujan Grisham, said in an email. “Our initial assessment indicates serious constitutional concerns that require immediate attention.”
In December, when Floodlight spoke to officials with New Mexico’s Energy, Minerals and Natural Resources Department, they said Trump’s previous threats to repeal IRA funds would likely lead to the state canceling their plans. At the time, they said they weren’t “overly concerned” that would happen.
New Mexico is set to receive $156 million to deploy rooftop solar systems on single-family homes and apartment buildings and help local utility companies integrate solar power into the state’s electric grid.
“The governor understands that these developments may cause uncertainty and anxiety,” Coleman said. “She wants New Mexicans to know that she is committed to advocating for them and protecting their interests.”
Legal experts argue grantees should ultimately win their battle to retain the federal funding that has been promised to them, citing court precedent set under Trump’s first term.
Romany Webb, deputy director of the Sabin Center for Climate Change Law, and her colleague Amy Turner, director of the the center’s Cities Climate Law Initiative, said in a blog that recipients of federal grants tied to the climate and infrastructure initiatives should move forward with fulfilling any federally mandated obligations for their respective programs and maintain comprehensive records to use in potential legal arguments.
“Federal agencies have contractually obligated about 84% of climate funding under the Inflation Reduction Act, which means they are required to disburse the funds as set out in the relevant agreements,” the pair wrote.
They referenced two 2018 decisions during Trump’s first term when federal courts in the District of Columbia and Maryland struck down attempts to cancel grants appropriated by Congress based on Trump’s desire to halt the spending.
Writing in the D.C. case, then-U.S. District Judge Ketanji Brown Jackson found that a “federal agency that changes course abruptly without a well-reasoned explanation for its decision or that acts contrary to its own regulations is subject to having a federal court vacate its action as ‘arbitrary (and) capricious.’ ” Jackson is now a U.S. Supreme Court justice.
In both cases, the courts found those cancellations violated the Administrative Procedure Act — the same federal law at issue in the current litigation.
“There is still much uncertainty, and many potential challenges ahead,” Webb and Turner wrote. “Perhaps the only sure thing is that the halting of federal financial assistance programs, even temporarily, will have significant implications for climate work at the national, state and community levels.”
Mario Alejandro Ariza contributed to this report.
YOU MAKE OUR WORK POSSIBLE.
Floodlight is a nonprofit newsroom that investigates the powerful interests stalling climate action.