A U.S. judge has struck down a Trump administration policy implemented last year that made it harder for wind and solar energy projects to claim federal tax subsidies.
In a ruling on Saturday, Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia said the Treasury Department’s IRS had failed to give an adequate reason for eliminating a longstanding definition for what it means for a project to be considered under construction.
Under federal law, renewable energy projects must begin construction by July 4 of this year or enter service by the end of 2027 to qualify for a 30 percent tax credit.
In his order, Trump stated that reliance on “‘green’ subsidies” poses a national security risk by making the United States dependent on supply chains controlled by foreign adversaries.
“Ending the massive cost of taxpayer handouts to unreliable energy sources is vital to energy dominance, national security, economic growth, and the fiscal health of the nation,” the order stated.
The lawsuit challenging the IRS rules was filed last year by the plaintiffs, including environmental groups Oregon Environmental Council and Natural Resources Defense Council, consumer advocacy organization Public Citizen, the city of San Francisco, and renewable energy consulting firm Woven Energy.
Their suit argued that the rule change would make electricity more expensive and stop renewable energy projects from being built.
“This decision puts an important check on the administration’s actions, which are driving up energy prices for everyday Americans in cities and towns across the country,” San Francisco attorney David Chiu said in a statement.
“We will continue to fight for the market fairness and predictability that allow clean energy providers to build projects that benefit us all.”
Kollar-Kotelly, who is 83, has blocked and struck down several actions by the Trump administration.
In 2017, during Trump’s first term, she blocked a ban on transgender individuals serving in the military.
Last year, she blocked a directive that would have required people to provide proof of U.S. citizenship to register to vote.
The case concerned Executive Order 14248, which Trump signed on March 25, 2025, with the goal of preventing illegal immigrants from voting.
Chief U.S. District Judge Denise Casper in Boston issued a preliminary injunction on April 21 at the request of a coalition of renewable energy groups.
The injunction blocks five specified agency actions, including Department of the Interior review rules, a wildlife permitting ban, land-use limits, an Army Corps memo, and a legal opinion that had tightened permitting and slowed wind and solar approvals.
The judge said the plaintiffs were “likely to succeed on the merits of their claims” that the Interior Department and other agencies adopted policies that violate the Administrative Procedure Act, which governs how U.S. agencies make and justify policy decisions.
Her ruling applies to members of the plaintiff organizations, which include RENEW Northeast and Alliance for Clean Energy New York.
“This is an undeniable victory for members of our coalition and the broader clean energy industry, as well as American households and businesses,” the groups said in a joint statement at the time.
