The Center for Rural Affairs filed suit against the United States on June 18, seeking damages after the EPA terminated its $62.45 million Solar for All grant, in a case that could determine whether agencies can cancel already-obligated Inflation Reduction Act funding after Congress repeals a program’s statutory authority.
The Center for Rural Affairs, a Nebraska nonprofit, filed a breach-of-contract complaint against the United States in the U.S. Court of Federal Claims on June 18, seeking monetary damages after the Environmental Protection Agency (EPA) terminated its Solar for All grant in August 2025. The EPA had awarded the Center $62.45 million in July 2024 to fund residential and community solar projects for low-income Nebraska households under the Inflation Reduction Act’s Greenhouse Gas Reduction Fund.
The Case Turns on Obligated Versus Unobligated Funds
Congress repealed Section 134 of the Clean Air Act, the statutory basis for Solar for All, through the One Big Beautiful Bill Act in July 2025, but the repeal language rescinded only “unobligated balances” of program funding. The EPA had obligated the Center’s full grant amount in July 2024, more than a year before the repeal took effect. The complaint cites floor statements from two House Energy and Commerce Committee leaders who said the bill would not touch funds already obligated, and notes that the Congressional Budget Office estimated the repeal would save the government only $19 million nationally, far short of the $7 billion Congress had appropriated and EPA had already awarded across all 60 Solar for All recipients.
The Center Chose Contract Law Over Administrative Law
Rather than challenging the termination under the Administrative Procedure Act, the Center filed under the Tucker Act, arguing the grant agreement was an enforceable contract and that EPA’s cancellation constituted a breach entitling it to money damages. The agreement’s termination clause was narrow, permitting unilateral cancellation only for substantial noncompliance, evidence of waste, fraud, or abuse, or misrepresentation of eligibility. According to the complaint, the EPA’s termination memorandum cited none of those grounds, relying instead on the program’s statutory repeal. The complaint also invokes judicial estoppel, quoting the Department of Justice’s own arguments from a separate Solar for All lawsuit in which DOJ said these same grant agreements are contracts that belong in the Court of Federal Claims, a position the Center argues DOJ cannot now reverse.
The case extends well beyond one Nebraska grant. The same legislation that repealed Solar for All’s authority reshaped a wide range of other IRA programs, and any recipient with an executed grant agreement and obligated funds facing a similar termination could look to this ruling as a guide. A win for the Center could expose agencies to broader financial liability for canceling other already-awarded grants. Companies and organizations still relying on IRA-era incentives have already had to distinguish between provisions that survived the rollbacks and those that didn’t.
The dispute is complicated further by the Center’s plan to use 75% of its award to capitalize a revolving loan fund intended to keep generating solar financing for Nebraska households well beyond the grant’s five-year period, a structure that could push damages calculations beyond the remaining grant balance alone. Uncertainty over federal funding reliability is already shaping how other state and nonprofit grant recipients plan around IRA-funded programs, regardless of how this specific case resolves.
