EPA may cut Nebraska's $62 million grant to bring solar to communities

A little to the south but with the same goal in mind, officials with the Village of Walthill have been working on plans to expand a small solar demonstration project in a community where some 50% of residents are low- to moderate-income.

But both communities’ plans — and those of others — appear to be on the chopping block.

Both were planning to draw on a portion of the $62 million the Environmental Protection Agency awarded the nonprofit Center for Rural Affairs in Nebraska last year through the federal agency’s Solar for All program.

The New York Times reported Tuesday that the Trump administration was preparing to terminate all 60 of the competitive grants nationwide — totaling $7 billion — that EPA awarded through its Solar for All program, which is part of the $27 billion Greenhouse Gas Reduction Fund established by the Biden-era Inflation Reduction Act.

Brian Depew, the center’s executive director, said the organization received a formal termination notice for the program late Thursday. So had other recipients of grants through the program, which include state agencies, nonprofit groups and Native American tribes.

EPA officials, however, said Wednesday that the agency had not yet made a final decision.

“With the passage of the One Big Beautiful Bill, EPA is working to ensure Congressional intent is fully implemented in accordance with the law,” an agency spokesperson said in an email.

But EPA Administrator Lee Zeldin posted on X Thursday that the agency was ending Solar for All for good, saying the act eliminated the Greenhouse Gas Reduction Fund, of which Solar for All is a part.

Depew, however, said the center’s position is that the Solar for All grant was awarded under contract with EPA rather than as the kind of grant subject to termination due to changed priorities.

The One Big Beautiful Bill Act, Depew said, does repeal the Greenhouse Gas Reduction Fund and rescinds “unobligated balances of amounts” to carry it out. But the Solar for All funds are fully obligated.

Indeed, the move is likely to draw legal challenges from grant recipients, the Times reported. A representative of the Southern Environmental Law Center, a nonprofit legal advocacy organization, told the Times that they would take the case to court. A similar effort to claw back climate grants already has resulted in a legal battle.

The program overall was intended to build residential solar markets and to help low-income and historically excluded groups benefit from solar energy through ownership opportunities, utility bill reduction and reduction of greenhouse gas emissions.

The center’s staff, Depew said, spent much of the first year of the grant working with EPA to determine how the project would work.

But now they have a pipeline of further-along projects that exceeds $20 million and plenty in earlier stages that would use the rest of the funds. While no contracts have been signed yet, the center is close to entering into an agreement with a developer interested in putting a solar array on a low-income, multi-family housing project. It also continues to work with communities like South Sioux City and Walthill that are interested in adding municipal solar.

“It would be really unfortunate timing if the grants were to be terminated at this point,” said Depew, who has been in contact with members of Nebraska’s congressional delegation.

Lance Hedquist, South Sioux City’s longtime city administrator, said the city hopes to tap about $1 million in funding through the program and has proposed that 60% of the funds come as a grant and the rest as a loan. Project costs would total about $1.5 million.

But without the funding, the city can’t proceed, he said. It will continue to accept bids but would have to opt not to award a contract if it doesn’t receive the funds.

South Sioux City contracts with various sources for electricity, including wind, solar and hydropower generators. It also operates its own solar array and Nebraska’s only battery storage facility. Some 51% of the city’s energy is renewable, said Hedquist, which is a selling point for the city and part of its focus on the environment. Earlier this summer, the city paved about 4,000 feet of roadway with asphalt infused with plastic bags.

Cities across Nebraska, in fact, have been adding solar in recent years both as an economic development tool and a hedge against future increases in energy costs.

“We do a good job of finding lower-cost energy for our customers,” Hedquist said. “This would help it further.”

Kevin Connot, an economic development specialist who contracts with the Village of Walthill, said the project the village is considering would initially supply electricity at a competitive rate but would lock into that rate for the 25-year life of the project.

That’s particularly important in a lower-income community like Walthill, where a significant number of residents are spending a higher percentage of their income on electricity compared with most in higher-income communities, he said.

The U.S., he said, needs all sources of electric generation to meet its growing demand. But he added that it’s important to note that traditional energy sources all have been subsidized historically.

“This is definitely a loss of an opportunity if this program is not successful or doesn’t move forward,” he said.