A second federal judge has ruled that the U.S. Environmental Protection Agency acted unlawfully when it terminated a $7 billion grant program for solar deployment, deepening the legal jeopardy facing the agency's effort to unwind the awards.

The decision, reported by TradingView, concerns the EPA's cancellation of the $7 billion program — funded under the Inflation Reduction Act and administered as the Solar for All initiative — which the Trump administration's EPA moved to shut down after taking office. The ruling marks the second time a federal court has found the termination did not comply with law, following an earlier decision on the same program.

The program's $7 billion in awards, issued under the previous administration through the EPA's Greenhouse Gas Reduction Fund, were directed to state, tribal and nonprofit recipients to finance residential solar projects, including rooftop and community-scale installations. For the solar supply chain — module makers, installers and community solar developers that had planned around the pipeline of funded projects — the termination froze a material stream of demand that had been committed on paper but not yet fully deployed.

The court's finding does not by itself restore the funding. What it does is establish, for a second time in separate litigation, that the EPA lacked legal authority to cancel the grants in the manner it chose. That distinction matters for the recipients: the awards remain federal commitments that the agency must now address through a lawful process, whether that means reinstatement, renegotiation or a renewed termination effort conducted on defensible procedural grounds.

The ruling also sharpens the broader confrontation between the executive branch and the courts over congressionally appropriated climate funding. The $7 billion solar program sits within a larger portfolio of Greenhouse Gas Reduction Fund awards that the administration has sought to claw back, and a pattern of adverse rulings — now two on this program alone — narrows the agency's options for executing that rollback without further litigation.

For the recycling and circular-economy sectors, the stakes run through procurement. Grant programs of this scale drive volume in distributed generation hardware, and the installation base they create becomes the future feedstock for panel reuse and recycling streams. A terminated program removes that forward tonnage before it materializes; a reinstated one restores the pipeline. The court's decision keeps the second scenario alive.

What happens next turns on the EPA's response. The agency must decide whether to comply with the rulings and release the funds, appeal, or attempt a new termination that satisfies the procedural standards the courts have now twice flagged. The recipients' next court filings — and any enforcement action seeking to compel disbursement — will determine whether the $7 billion moves from legal ruling back into actual project spend.