Federal agencies up against deadline to lift IRA funding freeze under court order

The Trump administration has until 5 p.m. Wednesday to respond to a judge's order to unfreeze Inflation Reduction Act (IRA) funds that have already been allocated by Congress. Judge Mary McElroy of Rhode Island set the deadline, ordering federal agencies to resume disbursing all IRA and Infrastructure Investment and Jobs Act (IIJA) grants nationwide. 

Despite the preliminary injunction, funds are still not flowing to many nonprofits, as EPA officials responded to inquiries stating the review process is ongoing. Federal agencies must detail their compliance with the court order or risk being held in contempt.

In a 63-page ruling, Judge Mary McElroy of the U.S. District Court in Rhode Island concluded that it’s unlawful for federal agencies to issue a sweeping freeze on congressionally authorized spending. “Nonprofits were left adrift as they scrambled to make sense of the government’s actions here. The pause placed critical climate, housing, and infrastructure projects in serious jeopardy, while also threatening the livelihoods of the nonprofits’ employees as well as their fundamental missions,” McElroy wrote in her decision.

Back in January, the Trump administration issued an executive order to freeze federal funding.  This put many government-funded programs in limbo nationwide, including the EPA’s $7 billion Solar for All program. After the Office of Management and Budget (OMB) issued the 90-day freeze to “review” government spending, many Solar for All grant recipients were locked out of the portal used to access the funds, disrupting clean energy projects already in motion. 

Within weeks, several federal judges issued court orders to unblock the funds. While the EPA confirmed to EnergySage that access to the portal had been reopened, according to state officials, the funds had been frozen, unfrozen, then frozen again without explanation. One representative told EnergySage, “Even after the courts ordered a Temporary Restraining Order to block the freeze, the state could not access various federal awards.”

While Trump faces a growing number of lawsuits across the country claiming that his on-again-off-again funding freeze is unconstitutional, state agencies continue to grapple with the admin’s erratic and unpredictable federal policies and non-compliance with judicial rulings.

One of the three Greenhouse Gas Reduction Fund (GGRF) programs initially developed under former President Joe Biden’s Inflation Reduction Act, Solar for All aims to make solar power available to low-income communities and lower electric bills for thousands of households across the country.

A $7 billion investment, the program is estimated to help nearly one million American low-income households benefit from solar energy, generating more than $350 million in electric bill savings annually, and reducing more than 30 million metric tons of CO₂ emissions over five years. Benefits like these now face an uncertain future due to the funding freeze.

The EPA awarded 60 grants to state organizations, nonprofits, tribal organizations, and municipal governments to create or expand low-income solar programs. Grant awardees were just beginning to access and distribute the funds when President Trump took office in January and ordered the freeze, causing grantees to pause their efforts. American farmers, nonprofits, and other environmental groups were also hurt by the withheld funds.

Since entering office, Trump has targeted climate programs like Solar for All and has expressed his desire to dismantle the IRA, repeal clean energy tax credits, and reverse Biden-era climate funding. His “Unleashing American Energy” agenda aims to “terminate the Green New Deal” by prioritizing fossil fuel production in place of clean energy investments like wind and solar, and slashing environmental protections.

But not all Republicans support IRA tax cuts, which would harm GOP districts the most and spike household energy costs in many red states, according to a report by The Rhodium Group.

Massachusetts

The Massachusetts Solar for All coalition was awarded $156 million in Solar for All grant funding. According to the Healey-Driscoll administration, the funding is expected to allow the Massachusetts Solar for All program to deploy 125 megawatts of solar capacity, provide a 20% reduction in energy costs to more than 31,000 low-income and disadvantaged households, support 2,800 clean energy jobs, and decrease annual carbon emissions by 70,500 tons.

The coalition is led by the Massachusetts Department of Energy Resources and includes the Massachusetts Clean Energy Center, MassHousing, and the Boston Housing Authority.

“The constantly changing disruptions to federal funding are hurting our residents and businesses. Massachusetts and New England states were awarded over $1 billion in investments to lower costs, create thousands of jobs, and protect clean air and water,” Maria Hardiman, spokesperson for the Massachusetts Executive Office of Energy and Environmental Affairs, told EnergySage.

“We secured these funds through agreements with federal agencies, and those agreements should be honored by the new administration. We will continue to work with the Attorney General’s Office to pursue a stop to this funding freeze and deliver for Massachusetts,” Hardiman said.

Hardiman confirmed that while the Executive Office of Energy and Environmental Affairs (EEA) award accounts are all currently open and that the state has resumed working on the program, EEA has been experiencing “other kinds of delays, such as canceled meetings with federal counterparts and added layers of review.”  

California

The California Solar for All Program (CA-SFA) was selected to receive $249,800,000 in Solar for All grant funding. The program is a coalition of state agencies, including the California Public Utilities Commission (CPUC), the California Employment Development Department (EDD), and the California Energy Commission (CEC).

According to Senator Alex Padilla, the funding is expected to help California add at least 247 megawatts of solar and 425 megawatt-hours of associated storage in low-income and disadvantaged communities, double the amount of solar energy in low-income multifamily complexes, and help households save an average of 29.2% on their electric bills.

Based on the CPUC’s website, which the agency directed EnergySage to, “The California Solar for All (SFA) grant is secured. California state agencies are in the administrative and planning phase of implementing this $250 million grant from the US EPA to benefit low-income Californians.” However, the CUPC extended its deadline for detailing its distribution plans for Solar For All funds until January 1, 2026.

Florida

The Florida Solar for All program was awarded $156 million in funding. The coalition consists of three Florida-based nonprofits: the Solar and Energy Loan Fund (SELF), Solar United Neighbors (SUN), and The Nature Conservancy in Florida (TNC).

If unfrozen, it’s estimated that the funding will help around 10,000 disadvantaged Floridian households receive financial assistance for installing rooftop solar. Low-income households would have their solar installation subsidized between 80% and 100%, while installations for moderate-income households would be subsidized between 60% and 80%.

While a SUN spokesperson declined to comment on the status of its grant, per the Florida SFA site, the program “is paused until further notice.”

Texas

The Texas Solar For All Coalition and the Clean Energy Fund of Texas were awarded $249.7 million and $156 million in grant funding, respectively. The funds will be used to distribute solar energy to disadvantaged communities in municipalities and counties in 11 different areas of Texas, including the Houston, San Antonio, Austin, and Dallas areas. 

According to the Texas Solar Energy Society (TXSES), one of the coalition's participants, the program is helping deliver about 225 MW of distributed solar facilities and 85 MWh of battery storage. It will provide an average of $17 million in annual household electric bill savings and will reduce statewide emissions by over 310 thousand tons per year.

Margaret Cook, a Vice President at Houston Advanced Research Center (HARC), another coalition member, told EnergySage that the program is in progress, and that “funding for Texas Solar for All has not been directly impacted. The Texas Solar for All Coalition is working hard to deliver solar to the communities in Texas that need it most, and we are hopeful that any future funding changes will not negatively impact this important work.”

Federal agencies were required to submit reports after the 90-day funding pause, detailing their spending review findings and recommendations on whether to continue, cancel, or modify federal aid, in alignment with the Trump administration’s policy objectives. 

While the National Economic Council (NEC) and Office of Management and Budget (OMB) will review the reports and brief the White House, it remains unclear whether the freeze will be lifted or extended.

Trump may rely on a process called rescission to cut federal spending, in which the president can seek congressional approval to permanently withhold funds already approved by Congress. While this process would likely take some time and provoke additional lawsuits, the continued uncertainty threatens to further disrupt Solar For All programs, leading to additional project costs, delays, and eventual cancellations.