Colorado sues EPA over canceled Solar for All funding

DENVER — Colorado is joining 22 other states in suing the U.S. Environmental Protection Agency after the agency abruptly ended a $7 billion federal program that was designed to lower energy costs and expand access to solar power in low-income communities.

The Solar for All program, created under the 2022 Inflation Reduction Act, aimed to bring solar energy to more than 900,000 households nationwide, including about 20,000 in Colorado. The state was awarded $156 million to install solar systems, create 1,000 jobs and expand clean energy access across disadvantaged areas.

The EPA canceled the program in August and reclaimed most of the money that had already been awarded. The decision left Colorado and other states unable to move forward with projects that were already in development.

Colorado and the other states argue that the agency violated federal law by terminating the program and breaching existing grant agreements. They filed two lawsuits this week: one in the U.S. District Court for the Western District of Washington and another in the U.S. Court of Federal Claims. The suits seek to restore the program and recover the lost funds.

According to the complaints, the EPA’s decision followed congressional action that rescinded only unobligated funds from the program, meaning money that had not yet been awarded. Colorado officials say the agency went beyond that directive by canceling grants that were already distributed.

The funding cuts could have lasting consequences for Colorado’s clean energy sector. Without the Solar for All investment, thousands of residents are expected to lose access to no-cost solar installations and lower energy bills. Industry groups have also warned that the loss of funds could slow job growth in one of the nation’s fastest-expanding clean energy markets.

The lawsuits were filed jointly by a coalition of states, including Arizona, California, Michigan, New Mexico and Washington, as well as the District of Columbia and several state economic agencies. Colorado officials say they remain committed to pursuing renewable energy initiatives even as the legal challenge moves forward.