A second federal judge has ruled that the U.S. Environmental Protection Agency acted unlawfully when it terminated a $7 billion grant program that funded residential solar projects, according to Reuters.

The ruling concerns the Solar for All program, a $7 billion initiative created under the Inflation Reduction Act and administered by EPA. The program awarded grants to states, territories, tribal governments and nonprofit organizations to deploy residential solar and energy storage, with a focus on low-income and disadvantaged communities.

This is now the second federal court to find that EPA's cancellation of the awards violated federal law. The decision follows an earlier ruling by another judge who reached the same conclusion on the program's termination.

EPA moved to scrap the program under the Trump administration, which had sought to unwind a broad set of climate and clean energy funding streams approved under the Inflation Reduction Act. The agency's effort to claw back the Solar for All grants drew lawsuits from grant recipients, including state agencies and nonprofit organizations that had already begun planning and procurement under their awards.

For the recycling and circular economy sectors, the ruling matters beyond solar deployment. Distributed generation and storage buildouts drive downstream material flows — end-of-life photovoltaic panels, inverters and lithium-based batteries — that will eventually require collection, processing and recovery capacity. Programs that establish deployment timelines also effectively establish the future waste stream timeline that recyclers and state regulators must plan against.

The court's finding that EPA lacked legal authority to terminate the awards reinforces the position that congressionally appropriated funds carry obligations the agency cannot unilaterally cancel. Judges in both cases have directed the agency toward reinstating the grants, though the pace of compliance and possible appeals remain open questions.

EPA has not confirmed whether it will appeal. A further appeal would push final resolution to a higher circuit court and extend the uncertainty for the dozens of grantees holding multi-year deployment commitments.

The next decisive milestone is the agency's response: whether EPA reinstates the $7 billion in awards as the courts have directed, or escalates to appellate review. Each path determines whether the deployment pipeline — and the material stream that follows it — stays on schedule.