A federal judge in Rhode Island ruled on Friday, September 18, 2026, that the Trump administration acted unlawfully when it canceled a $7 billion solar energy grant program. U.S. District Judge Mary McElroy found that the Environmental Protection Agency (EPA) exceeded its authority by rescinding funds that had already been obligated.
The Solar for All program was established in 2022 under the Inflation Reduction Act. In 2024, the EPA awarded grants to 60 recipients to expand solar access in low-income communities. However, following the passage of a tax and spending law in July 2025, EPA Administrator Lee Zeldin terminated the program in August 2025, describing the initiative as a "boondoggle."
Judge McElroy vacated the EPA's termination. In her ruling, McElroy stated that the EPA retained more than $3 billion for expenses related to the administration of grant programs and that Congress intended for the agency to continue managing grants that were already awarded. The EPA stated on Friday that it is reviewing the decision and considering an appeal, with a spokesperson saying the program lacked sufficient oversight.
The ruling affects more than 900,000 lower-income households across the majority of U.S. states that were identified by the EPA as beneficiaries of the Solar for All program. For these households, the program was designed to lower monthly electricity bills and provide access to clean-energy technology. The Rhode Island AFL-CIO estimates the funding will support thousands of union jobs nationwide if the program resumes.
The scale of the program involves 60 grant recipients including nonprofit groups, tribal governments, and state agencies. The $7 billion is part of a larger $27 billion Greenhouse Gas Reduction Fund. A separate $20 billion portion of that fund, intended for projects like residential energy efficiency and community cooling, was also previously terminated by the administration. However, a federal appeals court ruled last month that the termination of that fund was also improper.
This decision sets a legal precedent regarding the executive branch's ability to rescind funds that Congress has already obligated for specific purposes. For the solar companies and nonprofits involved in the lawsuit, such as Solar United Neighbors, the ruling potentially restores their ability to proceed with projects that had been stalled since August 2025. Related claims seeking to recover financial losses from the grant cancellations remain pending in the U.S. Court of Federal Claims.