The Virginia Department of Energy (Virginia Energy) sued the United States in the Court of Federal Claims for allegedly breaching Virginia Energy’s grant agreement with the U.S. Environmental Protection Agency (EPA) under the Solar for All zero-emissions technologies program. The complaint alleged that by February 2025, EPA and Virginia Energy had entered into the agreement, and EPA had obligated funding to Virginia Energy. The complaint alleged that in August 2025, EPA canceled the Solar for All program, unilaterally terminated the grant agreement, and withdrew more than $144 million of grant funds from the account in which Virginia Energy received the grant award. The complaint alleged that EPA “purportedly acted based on its misguided understanding of the One Big Beautiful Bill Act,” which repealed the Inflation Reduction Act’s Greenhouse Gas Reduction Fund provision pursuant to which the Solar for All program was established but rescinded only “unobligated balances of amounts made available to carry out that section.” Virginia Energy contended that EPA erroneously interpreted the OBBBA to rescind all Solar for All appropriations and also that EPA’s interpretation did not constitute grounds for termination under the terms and conditions of the grant agreement. Virginia Energy asserted claims of breach of the express terms of the grant agreement and breach of the implied duty of good faith and fair dealing. The complaint requested money damages; pre- and post-judgment interest; and reasonable fees, costs, and expenses, including attorney fees.

Breach of contract action brought by state recipients of grants under the Solar for All program after the U.S. Environmental Protection Agency's termination of the program.

Virginia Department of Energy v. United States

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Virginia Energy Department Filed Breach of Contract Action After Termination of Solar for All Funding

Filed

United States of America

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Production of electricity and heat from solar irradiation.

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Virginia Energy Department Filed Breach of Contract Action After Termination of Solar for All Funding

Policy instrument

Risk

Impacted group

Renewable energy

Greenhouse gas

Economic sector

Adaptation/resilience

Finance