By Wayne Schutsky | KJZZ
Gov. Katie Hobbs and Arizona’s congressional Democrats are demanding the federal government reverse the termination of hundreds of millions of dollars in grants to build solar projects in low-income communities.
In a letter to the White House and EPA Director Lee Zeldin, the Arizona Democrats called the Trump administration’s attempt to roll back the Solar for All program “an encroachment on Congress’s fiscal authority and a violation of established federal regulations.”
The program was established under the Inflation Reduction Act, a wide-ranging tax law signed by former President Joe Biden in 2022. The Biden administration awarded $7 billion in Solar for All grants to 60 organizations, with the goal of installing solar power in around 900,000 homes.
The state of Arizona received $156 million from the program, and the Hopi Tribe received $25 million to bring solar energy to the tribal community, where more than a third of homes do not have electricity.
Canceled
Earlier this month, Zeldin announced that the EPA was cancelling Solar for All, claiming Trump’s sprawling tax and immigration bill pulled back the funding authorization to administer the program.
“EPA no longer has the authority to administer the program or the appropriated funds to keep this boondoggle alive,” Zeldin said in a video announcement on social media on Aug. 7. “With clear language and intent from Congress in the One Big Beautiful Bill, EPA is taking action to end this program for good.”
But Hobbs and Arizona’s other Democrats disagreed.
“Despite your unilateral claim that the Solar for All program has been terminated, it is clear that the funds for its grant awards remain obligated,” according to the letter signed by Hobbs, Sens. Mark Kelly and Ruben Gallego, and Reps. Greg Stanton and Yassamin Ansari.
They cited an analysis put out by the Congressional Budget Office before the bill passed on June 4 that showed the EPA would only recover $19 million from the Solar for All program under the Big Beautiful Bill.
“This sum solely represents administrative funds returned to the U.S. Treasury,” according to the letter. “This analysis from Congress’s budget experts makes clear the actual legal status of the grant awards.”
They argued cancelling the program would jeopardize existing projects and “and waste months of program development and taxpayer dollars.”
The EPA did respond to specific questions about the Democrats’ assertion that the administration is illegally rescinding grant funding.
“EPA is reviewing the letter and will respond through the appropriate channels,” an EPA spokesperson said before referring back to Zeldin’s comments on social media.
Boon or boondoggle?
Zeldin argued the program was bogged down by overhead costs, with some dollars passing through multiple subcontractors.
“With all of the middlemen taking their own cut; at least 15% by conservative estimates,” he said.
And, Zeldin claimed, most of the funded projects are “still, very much, in the early planning stage” and haven’t actually started construction.
Arizona Democrats said that’s not true.
“The program’s termination harms America’s energy future and leaves grant recipients — many of whom have already hired staff and broken ground on critical projects — without the funding they are legally owed,” they wrote.
According to the Arizona Governor’s Office of Resiliency, the state was set to award the $156 million in grant funds it was scheduled to receive in 2026 with a goal of increasing the state’s rooftop solar capacity from 7 megawatts to 61 megawatt.
However, hundreds of millions of dollars in additional Solar for All grants were awarded to organizations pursuing multi-state projects that included Arizona.
Solar in flux
The grant cancellations are just one of several recent developments destabilizing the future of solar and other clean energy industries in Arizona.
Earlier this month, Arizona Public Service, the state’s largest electric utility, backed out of a commitment to use zero-carbon sources by 2050 as it invested in more natural gas generation. And, last week, state regulators began the process to repeal renewable energy requirements for the state’s utilities.
Regulators also approved an extra fee charged to APS customers who have solar panels on their homes.
All that comes as energy demands continue to break records across the state.
That means Arizona should be investing in more energy of all types, Gallego told Phoenix business leaders last week.
“I think we need to be putting as much energy as fast as possible online — renewables are the fastest you can do right now,” Gallego said.
He added that he supports using natural gas as a short-term “bridge” to bring more renewable energy online and that, ultimately, he believes the state will need to invest in more nuclear generation to meet demand in the future.
“And it's not going to be done by gas pipelines and won't just be done by solar rooftops,” he said.