EPA cuts off IRA solar money already under contract

EPA sent letters to recipients of a nationwide solar program Tuesday informing them that their grants had been paused until further notice.

The Solar for All program recipients — state and local government agencies and a few nonprofits — have signed contracts with EPA amounting to $7 billion. The program is part of the Inflation Reduction Act and is designed to help offset climate pollution and energy costs by financing community and rooftop solar in low-income communities.

EPA’s letter, which followed the announcement of a broader freeze on federal assistance Monday night, informed program participants that the agency was working with the White House Office of Management and Budget to implement President Donald Trump’s Jan. 20 executive order on “Unleashing American Energy.” It said EPA was pausing “all funding actions related to” Biden-era climate and infrastructure laws.

“At this time period, EPA is continuing to work with OMB as they review processes, policies and programs as required by the executive order,” the letter stated.

Four recipients contacted by POLITICO’s E&E News said they had lost access to EPA’s online grant management portal, called the Automated Standard Application for Payments, or ASAP, on Wednesday morning — more than 12 hours after a federal judge temporarily blocked Trump’s expansive spending freeze.

The recipients, who were granted anonymity to discuss government funding decisions, said they were not given any point of contact for questions related to the spending pause. Two said their EPA program managers had cut off contact.

OMB on Wednesday rescinded the Monday memo that initiated the spending freeze, but the ASAP portal was still inaccessible by midafternoon Wednesday, four grant recipients said. White House press secretary Karoline Leavitt said on X on Wednesday that the administration was not rescinding the spending freeze, only the OMB memo.

“This is NOT a rescission of the federal funding freeze,” she said.

EPA referred E&E News to the Justice Department. The Justice Department declined to comment.

Solar for All is one of three programs under the 2022 climate law’s Greenhouse Gas Reduction Fund. It’s the only one that still has funds at the U.S. Treasury. The money for the other two programs, totaling nearly $20 billion, has been deposited at Citibank under a financial agent agreement with Treasury.

The solar grants are all obligated, meaning that the federal government can’t legally claw back any of the contracted funds unless there is malfeasance on the part of the recipient, according to legal experts.

EPA grantees can typically access funds for expenditures five days out in the future through ASAP, with federal grant managers auditing transactions on the back end. The four Solar for All recipients said they haven’t been able to access the portal to draw down the money.

That might not change soon. Zealan Hoover, the Biden administration’s implementation lead for programs under the Inflation Reduction Act and the infrastructure bill, said roughly $50 billion in grants administered by EPA under those two laws are still frozen, pending reviews by the administration.

“They’ve frozen all [bipartisan infrastructure law] and IRA programs. That has not changed today,” said Hoover, who remains in contact with grantees since leaving the agency. “Everyone’s been getting rejections.”

Roman Castillo of CohnReznick, a grants management and administration vendor for some of the recipients, said his clients were making contingency plans in case the spending freeze continued — or if the Trump administration finds some other way to turn off the funding spigot.

“I think it’s safe to say that when funding flows are disrupted, Solar for All grant recipients have no choice but to reevaluate their financial commitments,” he said. “That uncertainty is likely going to result in delays or some sort of interruption in program implementation.”

The programs lend or grant money to sub-awardees to support solar power deployment in underserved communities. Those awards could be delayed, Castillo said, if grant recipients can’t depend on receiving the federal funds.

Adam Kent, director of the green finance program at the Natural Resources Defense Council, said administration actions targeting Solar for All would harm low-income communities, including in states that vote for Republicans.

“This is a local economic development program that’s going to touch all corners of our country and deliver energy savings and help communities become healthier and more resilient,” he said. “So to block these funds from moving forward is really callous and shortsighted.”

This story also appears in Energywire.