22 states sue EPA to restore $7B Solar for All funds
The multistate lawsuit argues EPA had no authority to de-obligate grants already awarded under the Inflation Reduction Act and warns the termination derails bill-savings, jobs, and community solar deployments
The legal fight over Solar for All has escalated from nonprofit litigation to a Senator-signed letter to now a full interstate challenge. Attorneys general from 22 states, plus D.C., Kentucky, Pennsylvania and the Wisconsin Economic Development Corporation, have sued the EPA to reverse the termination of the $7 billion Solar for All program, arguing the agency not only violated federal law but breached binding grant contracts that states had already begun to execute.
Filed in federal courts in Washington and in the Court of Federal Claims, the suits make two core assertions:
1) The EPA lacked authority to claw back already-obligated funds | “EPA has no lawful authority to deobligate any of Plaintiffs’ funds because… Congress directed EPA to appropriate the SFA funds, EPA obligated the SFA funds, and Congress did not direct that the SFA funds be deobligated,” one complaint states.
2) The cancellation creates material economic harm and derails programs | “Plaintiffs relied upon the SFA Program to meet benchmarks for clean energy production, to create jobs, to limit environmental damage…and to generate energy cost savings for households,” the filing says.
Who is suing
Lead plaintiffs include the attorneys general of Arizona, Minnesota, and Washington, joined by California, Colorado, Connecticut, D.C., Hawaiʻi, Illinois, Maine, Maryland, Massachusetts, Michigan, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, plus the governors of Kentucky and Pennsylvania and the Wisconsin Economic Development Corporation.
What the states say they are losing
As we’ve documented in our “Solar For None” series, under Solar for All, funds had already been awarded to 60 states, tribes, utilities and nonprofits before the July cancellation. States say those dollars were tied to real work already underway:
- Arizona AG Kris Mayes: “I will not let the EPA wriggle out of its commitment… Arizona families are already facing sky-high electricity bills.”
- California PUC President Alice Reynolds: “The cancellation of Solar for All funding is not just bad policy, it is illegal.”
- Oregon AG Dan Rayfield: “This funding wasn’t just about protecting the environment; it was about lowering bills, creating jobs, helping communities transition.”
- Connecticut AG William Tong: “Trump cannot unilaterally reverse course now, and we’re suing to make sure Connecticut gets every penny we are owed.”
California alone cites nearly $250 million in canceled awards, including $200 million for community solar and storage for low- and middle-income families and $9 million for workforce training. Massachusetts estimated the program would have delivered up to 20% bill reductions for 29,000 households; national estimates cited $8+ billion in lifetime bill savings.
Obligated
The complaints echo what Ben Delman said in our Solar United Neighbors interview — that all $7B was already “obligated” by August 2024 — before the One Big Beautiful Bill was signed — a key legal distinction in federal appropriations law. Terminating obligated funds after fact, they argue, violates both the Administrative Procedure Act and the separation of powers.
