A federal judge in Rhode Island ruled on September 18, 2026, that the Trump administration unlawfully terminated a $7 billion solar energy grant program designed to expand access to solar power in low-income communities across the United States. U.S. District Judge Mary McElroy found that the Environmental Protection Agency, under Administrator Lee Zeldin, exceeded its authority when it canceled grants that had already been awarded through the Solar for All program. The judge vacated the EPA's termination, although the agency said it is reviewing the decision and considering an appeal.
Solar for All was created under the Inflation Reduction Act, the major climate and energy law signed into law in 2022 under former President Joe Biden. Congress approved $7 billion for the program, which the EPA awarded in 2024 to 60 recipients, including states, tribes and nonprofit organizations. The program was intended to expand residential and community solar access for nearly 1 million households across most U.S. states while reducing electricity costs and greenhouse gas emissions.
The dispute began after President Donald Trump signed the One Big Beautiful Bill Act into law in July 2025. The legislation eliminated the funding source for the Solar for All program. One month later, Zeldin announced that the EPA was terminating the program. The EPA characterized the initiative as wasteful spending, with the agency later arguing that it reflected the previous administration's approach to federal spending and lacked sufficient oversight.
The judge's ruling focused on what Congress had actually authorized after the 2025 law changed the program's funding. McElroy found that although the new law removed the underlying source of funding, Congress had retained more than $3 billion for necessary expenses associated with administering grant programs. In her interpretation, that meant the EPA was still required to administer grants that had already been awarded. She concluded that the agency had acted contrary to congressional intent and without another statutory authority when it terminated Solar for All.
The case was brought by the Rhode Island AFL-CIO along with several nonprofits and solar companies. Some plaintiffs were not direct recipients of Solar for All grants but argued that they would benefit from the program through expanded solar development, employment and economic activity. Solar United Neighbors was among the nonprofit plaintiffs. The case therefore brought together labor and clean-energy organizations challenging the federal government's decision to cancel a program that had already moved beyond the planning stage and into awarded grants.
The decision could have practical consequences for communities that were expecting Solar for All funding to support solar installations and related programs. The EPA had previously estimated that the initiative would reach nearly 1 million households and help lower electricity costs while reducing emissions. The program was specifically structured around communities that have historically faced greater barriers to accessing the financial benefits of renewable energy, making the fate of the grants relevant to both clean-energy deployment and household energy costs.
The ruling also comes amid broader litigation over the Trump administration's efforts to reverse federal clean-energy spending established under the Inflation Reduction Act. Solar for All was part of the $27 billion Greenhouse Gas Reduction Fund, sometimes described as a national "green bank." The larger fund was designed to finance clean-energy and climate projects through states, financial institutions and nonprofit organizations. The Trump administration also moved to terminate the remaining $20 billion of that fund, which was intended to support projects ranging from residential energy efficiency to larger community climate investments.
A separate federal appeals court ruled in August 2026 that the administration had improperly terminated the broader Greenhouse Gas Reduction Fund, according to the Associated Press. That litigation is separate from the Solar for All case, but the two cases illustrate the wider legal dispute over whether the administration could cancel federal climate grants that Congress had previously authorized and funded.
The September 18 ruling does not necessarily end the dispute. The EPA said it was reviewing the decision and considering its options, including an appeal. Other lawsuits related to the cancellation of Solar for All are also pending. Claims seeking to recover financial losses resulting from the terminated grants have been filed in the U.S. Court of Federal Claims.
The case also highlights the importance of how federal funding legislation is interpreted after a change in administration. The Trump administration argued that the 2025 legislation removed the funding basis for Solar for All, while the plaintiffs argued that already-awarded grants could not simply be canceled because Congress had retained funding for administering existing grant programs. Judge McElroy's ruling sided with the latter interpretation in this case.
For the U.S. solar industry, the decision provides another development in an increasingly uncertain federal policy environment. Solar has expanded rapidly in the United States, but developers, community organizations and clean-energy companies have faced changing federal incentives and funding rules under the current administration. The outcome of the Solar for All litigation could determine whether previously awarded community solar funding can proceed despite the broader rollback of federal climate programs.
The program's potential impact is also tied to the changing economics of electricity. Community and residential solar can reduce exposure to electricity costs for participating households, particularly where projects combine solar generation with financing or other forms of assistance. Solar for All was designed around this model, linking renewable-energy deployment with lower-income communities rather than focusing only on large commercial and utility-scale projects.
The September 18 ruling therefore leaves the $7 billion Solar for All program in a different legal position from where it stood after the EPA announced its cancellation in 2025. The grants have been restored by the court's decision, but the administration may appeal and other legal proceedings remain unresolved. The final outcome will determine whether the 60 recipients awarded funding in 2024 can continue implementing the projects originally supported by the program.
For now, the ruling establishes that the EPA did not have the authority, in Judge McElroy's view, to terminate the already-awarded Solar for All grants in the manner it did. The decision could allow the program's planned investments in community solar and lower-income households to move forward while the broader legal and political dispute over federal clean-energy funding continues.