North Carolina and 22 other states are suing the Environmental Protection Agency, seeking to reinstate a $7 billion program meant to help low-income and disadvantaged communities install rooftop solar power systems.
The Solar for All program was created in 2022 by the Inflation Reduction Act, with states and local governments required to apply to receive funds from the program. North Carolina's $156 million award would have helped put solar panels on more than 12,000 homes, according to N.C. Department of Environmental Quality officials.
But in August, EPA Administrator Lee Zeldin canceled the program, before states could spend billions of dollars from it.
N.C. Attorney General Jeff Jackson and 22 of his colleagues are arguing the the EPA did not have the authority to cancel the program and rescind funds that had already been appropriated by the U.S. Congress for a specific purpose.
Furthermore, Jackson said, while the EPA pointed to this summer's Big Beautiful Bill as the impetus to slash Solar for All, Congress was clear that it did not intend to rescind Greenhouse Gas Reduction Fund money that had already been obligated with that legislation.
"This is a pretty straightforward case from a legal standpoint. I think EPA just decided that they would rather not spend this money, and they're willing to act in defiance of Congress, and we're just going to go to court and point that out," Jackson said in an interview.
When EPA canceled Solar for All, North Carolina had yet to receive over $150 million of its funds. Jackson said the state was just weeks away from drawing that money down.
"We had already been awarded the funds. The funds were sitting in an account marked for our state," Jackson said.
In an Aug. 8 video announcing that the EPA was canceling the Solar for All program, Zeldin pointed to H.R. 1, the sweeping spending and tax legislation Congress passed this summer.
"But the bottom line again is this: EPA no longer has the authority to administer the program or the appropriated funds to keep this boondoggle alive. With clear language and intent from Congress in the One Big Beautiful Bill, EPA is taking action to end this program for good," Zeldin said.
Jackson and the other attorneys general contend that Zeldin and EPA are misinterpreting what Congress intended under H.R. 1.
In fact, court filings say, members of Congress were very clear that any Greenhouse Gas Reduction Fund awards that had already been obligated should be allowed to continue serving their originally intended purpose. Solar for All was part of that program.
The law itself says, "Section 134 of the Clean Air Act ... is repealed and the unobligated balances of amounts made available to carry out that section ... are rescinded."
And when the bill was being marked up before the House Energy and Commerce Committee's Subcommittee on the Environment in May, then-chair Rep. Morgan Griffiths, a Virginia Republican, said, "These provisions that we are talking about only apply as far as this bill is concerned, to the unobligated balances. So if a grant was already given, as far as this bill is concerned, then that would still be going forward."
Impact in North Carolina
If Solar for All moved forward, state officials anticipate that it would help more than 12,000 households install solar panels, helping them save an average of 20% on utility bills. That's worth about $400 on average, according to the Clean Energy Fund of the Carolinas.
The N.C. Department of Environmental Quality also points to the potential for solar panels to be paired with storage systems, providing energy to a home in the case of a prolonged power outage.
"The program’s cancellation would hurt the electric grid’s ability to be resilient to future disasters, and would hamper North Carolina’s efforts to ensure reliable, clean and affordable energy supplies to meet the needs of a rapidly growing population and rising energy demand," DEQ Secretary Reid Wilson said in a statement.
North Carolina's Solar for All program, dubbed EnergizeNC, planned to install at least 43 megawatts of solar energy over five years. It would have focused on single-family homes, as well as multifamily housing, homes where residents have medical needs and some community solar pilot programs.
"EnergizeNC was primed to deploy a pilot program for home solar and battery backup that would offer back-up power during grid outages for households with medical equipment needs. That battery backup equipment would do double-duty by helping utilities manage the electric grid on very hot or very cold days, when power needs surge," Melissa Malkin-Weber, the executive co-director of the Clean Energy Fund of the Carolinas, said in a statement.
The program was also expected to create about 140 jobs in North Carolina, with many of those concentrated in rural areas.
The 23 states challenging the EPA's cancellation of Solar for All filed two separate claims on Wednesday.
In the Western District of Washington, they argued that the EPA's cancellation of the program violated the Administrative Procedure Act and U.S. Constitution's Separation of Powers Doctrine. States are asking the court to declare the EPA's interpretation of H.R. 1 unlawful and to reinstate the Solar for All program.
Then, in the U.S. Court of Federal Claims, they argued the EPA had breached its contracts with recipients by canceling the grants.
