Last month, community power developer Groundswell was collecting bids from developers for 10 solar projects, constituting 24 megawatts of power across seven states.
The projects were set to be financed through Groundswell’s $156 million Solar for All grant, and the nonprofit had been working on them for months to ensure compliance with the Environmental Protection Agency’s strict procurement requirements. By August, the projects were shovel-ready, and Groundswell was just a few weeks away from signing the first contracts. But on August 7, the EPA sent out letters announcing the termination of the program.
Groundswell’s CEO Michelle Moore was surprised by the news. “The program had been operating in a typical fashion, we were having regular meetings with our program officer, and Groundwell was very much on target in terms of our work plan,” she told Latitude Media. “It was not anticipated.”
The EPA launched the Solar for All program in June 2023 as part of the Greenhouse Gas Reduction Fund, the so-called “green bank” created by the Inflation Reduction Act. The program allotted $7 billion in federal funds to promote and expand distributed solar access, in order to lower the electricity bills of 900,000 low-income households across the country.
If successfully deployed, the program was expected to cut electricity bills by at least 20% for one million low-income American families, amounting to around $350 million in annual savings.
“Families are going to lose out on 400-plus dollars per year in bill savings. That’s rent money, that’s grocery money, that’s money for medicine,” Moore said. In some communities where Groundswell operates in the Southeast, for instance, some families pay up to $700 in utility bills for 900-square-foot houses that are old and inefficient; the on-hold projects were expected to cut electricity bills by more than $1,000 a year for 4,400 families in states such as Mississippi, Alabama, and Georgia.
Groundswell was just one of 60 awardees that have spent the last two years working to deploy the funds. Kerry O’Neill, CEO of Inclusive Prosperity Capital, a nonprofit investment platform that was awarded $249.3 million as part of the program, says having to halt work on projects delivering such meaningful savings is “heartbreaking.”
“There was just so much amazing work and momentum that was going on when the brakes were slammed with the termination letters,” she said. Inclusive Prosperity Capital had already committed funds to 10 projects, amounting to $48 million for 13 MW that would have served about 2,500 homes.
But the impact of the program’s termination is not just to the blocked projects and their beneficiaries; it also risks wasting months, and in some cases years, of preparation work, and upending the jobs of the people who were hired to do it.
Gwen Yamamoto Lau, executive director at the Hawai’i Green Infrastructure Authority, which was awarded $62 million as part of the program, told Latitude Media in an email that her organization was expecting to serve over 5,700 low-income households, and that it was using the funds for administrative expenses and contractor payments.
“[We were] using the funding to support three employees and had executed contracts with four vendors. Without this funding, we have already been forced to reduce employee work hours as well as require staff to take on responsibilities outside of their job description to remain employed,” she said. “Vendors remain in limbo due to the uncertainty and may need to adjust their staffing levels due to the sudden and unexpected loss of the funds.”
Less than a week after receiving the termination letter, Yamamoto Lau learned that the authority’s Solar for All account had been suspended. On August 18, the account’s status was changed to “liquidated,” and its available balance reduced to roughly $4 million.
How we got here
One of the reasons the program’s termination came as a shock to many awardees, was that the funds had been frozen and unfrozen already. In February, the early days of the Trump administration, grant recipients received notice from the federal Office of Management and Budget that funding was on hold alongside countless other programs. They had no indication when or if they might receive their money, and the funding portal to request reimbursement was shut down.
In March, the EPA sent notices that it was terminating agreements for other grant awards under the GGRF, including the National Clean Investment Fund and Clean Communities Investment Accelerator, which led to an ongoing legal battle over whether the agency has the authority to do that or not.
But while that was happening, the EPA lifted the funding freeze for Solar for All and re-engaged with the grantees, advancing work even as it cancelled other IRA disbursements. And so in the months since, many grantees have remained optimistic.
“Up until [the letter came], we, as a cohort of Solar for All folks, felt like we had made it through the [One Big Beautiful] Bill negotiations, and made it to the other side,” O’Neill said, noting that the program added energy to the grid and created jobs, which made it aligned with the goals and the focus of the current administration. “It’s mind-boggling that the government would take such an impactful tool for addressing pocketbook issues, grid issues, and demand issues and take it off the board.”.
Zealan Hoover, who served as senior advisor and director of implementation at the EPA under former President Biden, told Latitude Media that the cancellation appears to be part of the current administration’s “expansive effort to target the wind and solar industries,” which has included the abrupt cancellation of high-profile wind projects, among other things.
“The risk there is that we have rapidly increasing electricity demand, and renewables are the only source of generating capacity that can be deployed quickly,” Hoover said. “If you want to meet artificial intelligence demand now, you have to be out there building renewable energy. And yet, this administration is embracing AI and kneecapping solar. The equation does not balance.”
What comes next?
Many of the awardees, including Groundswell, Inclusive Prosperity Capital, and the Hawai’i Green Infrastructure Authority, are disputing the termination of the program.
For example, Hawai’i Green Infrastructure Authority submitted a notice of disagreement on August 27 and a dispute letter on September 5, requesting “the rescission of the termination of this Grant Agreement, reinstatement of the Grant Agreement for the originally awarded amount, scope of work, and performance period, restoration of the unused balance to [the authority’s account,] and reinstatement of the notice to proceed.” The EPA informed the organization that it will render a decision regarding the dispute by February 2026.
Meanwhile, the grantees are looking for alternative sources of capital to move the projects forward — and avoid wasting the months of work.
“We are scrambling to try to help find other sources of capital, either for us or for them, because this work is too important to let die on the vine,” O’Neill said, adding that she’s been researching to see if there are green banks and community development financial institutions with “pockets of money” and appetite for stepping in. “One of the challenges is that many CDFIs don’t lend beyond 10 years, which is fine for construction, but that 10-year loan or 12-year loan isn’t going to cut it for a 20= or 25-year permanent financing facility that’s needed.”
But those sources of private capital are hard to obtain. As Hoover notes, the reason the Solar for All Program exists is to finance small- and medium-sized solar projects that have a positive return on investment, but are too small to attract “Wall Street capital.” While it’s likely that many of the most compelling projects will still manage to find some financing, private capital’s borrowing costs are generally higher.
“You’re going to get squeezed somewhere if you’re raising from private capital markets, instead of through a government grant,” Hoover said. “There will still be projects, but there will be fewer of them, and they will have far less impact, whether that means fewer projects or less electricity cost savings.”
