Attorney General Kwame Raoul has joined a group of 14 attorneys general supporting a lawsuit that challenges a new Internal Revenue Service (IRS) notice affecting wind and solar energy projects. The coalition argues in an amicus brief that the IRS change will make it more difficult for these projects to qualify for long-standing federal tax credits, which could impact investments in clean energy, economic growth, and utility costs.
“This is yet another burden imposed by the administration that financially harms residents in Illinois and across the nation while also jeopardizing our environment,” Raoul said. “I will continue to partner with my fellow colleagues to protect our communities and environment from this administration’s unlawful actions.”
For years, developers of wind and solar energy could access tax credits by either beginning significant construction or investing at least 5% of a project’s total cost. The recent IRS notice removes the 5% investment option for most wind projects and larger solar facilities but leaves other energy sectors unaffected.
Raoul and his colleagues argue that this change is unlawful, arbitrary, and harmful to consumers. They highlight that with increasing electricity demand driven by factors such as data centers, artificial intelligence, advanced manufacturing, and population growth, restricting new energy projects may tighten supply. As supply tightens while demand grows, prices are likely to rise, leading to higher utility bills for families and businesses.
Federal clean energy tax credits were designed to stimulate investment in electricity generation capacity and lower long-term consumer costs. Previous federal projections indicated these credits would help bring hundreds of gigawatts of new generation online, reduce annual electric costs for consumers by billions of dollars, and cut air pollution as well as greenhouse gas emissions.
The attorneys general assert that the IRS did not adequately justify its decision or consider impacts on state-level energy planning, consumer expenses, or ongoing projects. Their amicus brief asks the court to overturn the notice and restore prior standards that had been used for over ten years. These federal clean energy tax credits are scheduled to expire on July 4, 2026.
The lawsuit was filed in the U.S. District Court for the District of Columbia by groups including Oregon Environmental Council, NRDC (Natural Resources Defense Council), Public Citizen, Hopi Utilities Corporation, Woven Energy, San Francisco city and county officials, and Maryland’s Office of People’s Counsel.
In addition to Illinois Attorney General Raoul—whose office advocates for vulnerable populations such as workers, immigrants, seniors (official website), handles thousands of consumer complaints annually (official website), promotes community safety as well as environmental protection (official website), extends advocacy efforts statewide (official website), partners with law enforcement on crime victim support (official website), and provides services such as fraud complaint filing (official website)—the brief includes attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Maine, Michigan, Minnesota, New Mexico, New Jersey, Oregon, Rhode Island and Washington.
