Municipalities and nonprofits across the country may have to abandon planned solar energy projects after the Environmental Protection Agency announced it was terminating a $7 billion grant program to expand solar access.
The Solar for All program was established by the 2022 Inflation Reduction Act with the goal of expanding solar to municipal public power agencies, multi-family housing developments and single-family homes. The program was specifically focused on reaching low-income households and communities.
But on Aug. 7, as part of the current administration’s continued efforts to rescind funding for clean energy projects, organizations across the country received a notice of termination. EPA Administrator Lee Zeldin posted a video announcing the termination on Aug. 8, calling Solar for All funding “green slush fund dollars.”
Sixty grant recipients were announced last fall after a competitive process. Kansas, Iowa and Oklahoma are the only states in the country to lack a state-specific grant under the program, though they all would have been involved in at least one multi-state grant. Most other states received funds through a state agency, like Missouri’s Environmental Improvement and Energy Resources Authority, or a nonprofit group, like Nebraska’s Center for Rural Affairs.
Those grantees spent the past year in an intensive planning period, with most poised to begin awarding money for projects in the coming months.
Solar for All was part of the Greenhouse Gas Reduction Fund, a $27 billion clean energy program created by the Inflation Reduction Act. But the One Big Beautiful Bill Act that lawmakers passed in July removed the EPA’s authority to administer that funding and clawed back dollars that were “unobligated,” or not allocated under a binding agreement.
Grantees weren’t immediately worried by the rescinded funding in the new law, since Solar for All funding has been fully obligated. Now, with the funds frozen, the path forward isn’t clear. Some grantees and advocacy groups have threatened legal action, though no litigation has been filed as of Aug. 25.
In Nebraska, multiple projects were in the final planning phases with about $20 million of the state’s $63 million award set to go out in the coming months, said Brian Depew, the executive director of the Center for Rural Affairs. For a state like Nebraska, where not even 1% of the state’s electricity generation comes from solar, Depew said the funds were a generational opportunity to kickstart the industry.
“This was not just, like, a one and done concept for us,” he said. “It was to really revolutionize that market and spur additional activity, even beyond what we’d be able to finance through the initial Solar for All cohort.”
Many states in the Midwest and Great Plains make up the bottom of the pack for solar’s share of total generated electricity – with the notable exception of Texas, which generates more than 8% of its total electricity from solar, according to the Solar Energy Industries Association. Kansas, Oklahoma and North Dakota all generate less than 1%. Iowa, South Dakota, Missouri and Michigan generate between 1% and 2%.
Cities and developers prepare to scrap planned projects
In Michigan, about $13.9 million of the state’s $156 million award has already been allocated for pilot projects across the state. Those projects are now on hold.
Benton Harbor, a small city of about 9,000 people in southwestern Michigan, was awarded $3.3 million for a project to install solar panels at three city facilities, according to city manager Alex Little. Part of the project would have created a "resiliency center” at the city’s community center to house vulnerable residents in case of power outages or severe weather events.
“If citizens in our two low-income high-rises were impacted and there was no place for them to go, we would be able to house them in our (community center), and provide enough power from a battery that would be charged from solar collection to be able to generate enough power to provide them refrigeration, heat or cool, whatever the case may be, for at least a day or a day and a half,” Little said.
The project would have been Benton Harbor’s first foray into solar energy. Little said he expected it would have resulted in significant energy cost savings for the city, which they planned to pass along to residents.
“The plan was that we would take 50% of all savings and distribute it to as many as we could to pay up to 20% of their average utility bill each month,” he said. “It was disappointing and disheartening that a program that would do so much good for those who need it would be frozen.”
Texas’ Solar for All coalition was set to receive the second-largest state-level award of nearly $250 million. A rooftop solar installation project in the southern Texas city of Laredo would have funded solar battery storage for low-income residents with medical needs to keep their equipment running in case of power outages. In Waco, the program would fund scholarships for a degree in solar energy technology at a local community college.
In a statement on its website, the coalition said ending the program would be a “huge loss for Texas.”
“We are currently assessing the real impacts this will have on everyday Texans and the various organizations that came together to make this program happen,” the statement said. “The Solar for All program set out to support families facing rising energy costs, and to ensure local job creation, investment boosts in Made-in-America manufacturing, and greater energy independence.”
One of the Nebraska communities in advanced discussions was South Sioux City, which is already a leader in renewable energy in the Midwest. More than half of the municipal system’s energy comes from renewable sources, according to longtime city administrator Lance Hedquist, and the Solar for All funds would have helped build another 2.3-megawatt solar farm on land already owned by the city.
“We have the land in hand,” Hedquist said. “Our intention was to build a system that would serve about 5% of the city’s electricity on that piece of land – and it made a lot of sense to do that – but obviously, unfortunately, at the last minute, the funds were withdrawn from the city and from a lot of communities across the country.”
The city opened up the bidding process for constructing the solar farm in July, but will not take the bids to the city council for approval without federal funding.
“Kind of a sad ending,” Hedquist said.
Legal battle likely
Nonprofit groups and other grantees have vowed to take the EPA to court over the funding cancellations. They argue that the termination is illegal because the funds were fully obligated.
“The Center for Rural Affairs, as well as all the other grantees, have a fully executed binding contract with EPA that contractually obligates the funds to the various awardees,” Depew said.
State agencies in Minnesota and Michigan said in statements that they are exploring legal options with their respective attorneys general. On Aug. 15, 30 Democratic Senators sent a letter to Zeldin in which they said the terminations were blatantly illegal. Depew said the Center and many other grantees are assessing their options, including potential legal action.
But the prospect of a drawn-out court battle is cold comfort for the communities that had projects planned.
“I very much doubt, in today’s world, that would be successful,” Hedquist, in South Sioux City, Nebraska, said of a potential lawsuit.
In Benton Harbor, Michigan, Little remains a bit more optimistic.
“We certainly have hope that by any means it might be restored, whether that’s a change of heart of the administration, or if it’s done through some sort of legal action,” he said. “Our people’s need for the benefits of that kind of program is the same, either way.”
The administration has doubled down on reducing federal support for solar and wind energy projects in recent weeks. On Aug. 18, the U.S. Department of Agriculture announced that some solar projects will no longer be eligible for various loan programs and grants administered by the department. Days later, Trump called solar and wind energy “the scam of the century” in a social media post and vowed to not approve “wind or farmer destroying solar.”
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest and Great Plains. It reports on food systems, agriculture and rural issues.
