IRA rebate programs are being managed by the states and territories, and more than half the rebate money had already been issued or promised before Trump took office.

In a significant departure from the Biden administration's energy policies, Trump on his first day back in office signed an executive order (EO) that paused major funding initiatives tied to the clean energy movement. The “Unleashing American Energy” EO called for the termination of the "Green New Deal" and ordered all agencies to immediately pause the disbursement of funds appropriated through the IRA or the Infrastructure Investment and Jobs Act (IIJA). The pause was to last 90 days, during which time, as Sec. 7 of the order states, agencies “shall review their processes, policies, and programs for issuing grants, loans, contracts, or any other financial disbursements of such appropriated funds for consistency with the law and the policy outlined in section 2 of this order.”

That 90-day pause is scheduled to conclude April 20. In the meantime, judges, states, and advocacy groups have been busy disputing its legality. Within the month, two federal judges had placed a block on Trump’s spending freeze, saying it was likely unconstitutional. In a 13-page order issued January 31, U.S. District Judge John McConnell said the Trump administration cannot “pause, freeze, impede, block, cancel, or terminate … obligations to provide federal financial assistance to states” because the funding had already been appropriated by Congress, and thus cannot be unilaterally overridden by the president. A week later, though, a group of 22 state attorneys general and Washington, D.C.’s attorney general accused the Trump administration of continuing to block disbursement of IRA grant funding to states, in violation of that court order. They filed a motion to enforce it. After a brief pause, federal funds started flowing to states’ energy rebate programs again.

In mid-April, two judges’ rulings restored federal climate funds — albeit briefly. In Rhode Island, six nonprofit groups that also had funds halted brought a case against several federal agencies, including the U.S. Department of Energy (DOE). Federal judge Mary McElroy on April 15 ruled those agencies did not have the authority to freeze the funding. She ordered the agencies to “resume the processing, disbursement, and payment of already-awarded funding appropriated under the Inflation Reduction Act or the Infrastructure Investment and Jobs Act, and to release awarded funds previously withheld or rendered inaccessible.” The judge also told the agencies to stop “freezing, halting, or pausing on a non-individualized basis” money already awarded under the IRA or the IIJA. She rejected the defendants’ contention that the federal agencies have broad power to freeze funding already approved by Congress. “The Agencies likely possess narrower powers related to individualized funding pauses and terminations, but in cases of vast economic and political significance — like this one — the Supreme Court has urged lower courts to be skeptical of agencies sweeping claims of power,” McElroy wrote.

The next day, in Washington, D.C., U.S. District Judge Tanya Chutkan ruled similarly, ordering the Environmental Protection Agency (EPA) to immediately release at least some of the $20 billion in IRA climate grants awarded to nonprofits from the Greenhouse Gas Reduction Fund. EPA cannot block the disbursement of money that had already awarded and was due to be distributed, she ruled. EPA immediately appealed, and a panel of appeals court judges then ruled in favor of the status quo, saying the funds “should neither be returned to the U.S. Treasury Department nor released to the climate organizations so that the panel would have adequate time to consider the case,” according to The Hill.

While Trump’s 90-day pause period is quickly coming to an end, there has not been any announcement from the administration on the outcomes of the review period. At the time of the pause, 11 states and the city of Washington, D.C. had launched rebate programs, which were set up to be funded by the federal government but distributed by the states. HVAC contractors are advised to work with their state governments to determine if the program is available in their states.