Attorney General Kwame Raoul has joined a group of 14 attorneys general in supporting a lawsuit that challenges a recent Internal Revenue Service (IRS) notice. The notice makes it more difficult for wind and solar energy projects to qualify for federal tax credits that have been available for years. In an amicus brief, Raoul and the coalition claim that this change will discourage investment in clean energy, slow economic growth, and raise costs for both families and businesses.
“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.”
Previously, developers could access these tax credits by either beginning significant construction or investing at least 5% of a project’s total cost. The new IRS guidance 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 the IRS notice is unlawful, arbitrary, and harmful to consumers. They highlight that electricity demand is rising due to factors such as data centers, artificial intelligence, advanced manufacturing, and population growth. Limiting new energy projects could restrict supply at a time when demand is increasing, which may lead to higher utility bills for families and businesses.
Federal clean energy tax credits were established to promote investment in new electricity generation capacity and help lower long-term consumer costs. Earlier federal estimates indicated these credits would support hundreds of gigawatts of new generation, reduce consumer electric costs by billions annually, and decrease air pollution as well as greenhouse gas emissions.
The attorneys general contend that the IRS did not provide sufficient justification for its decision or consider its effects on state energy planning, consumer expenses, or ongoing projects. They are asking the court to overturn the notice and reinstate previous 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 several clean energy and consumer organizations including the 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.
Other attorneys general joining Raoul in filing the amicus brief represent Arizona, California, Colorado, Connecticut, Delaware, Maine, Michigan, Minnesota, New Mexico, New Jersey, Oregon, Rhode Island and Washington.
The Illinois Attorney General’s office has advocated for vulnerable groups such as workers, immigrants and seniors (official website). It also handles thousands of consumer complaints each year (official website) while aiming to protect consumers and promote safer communities (official website). The office extends advocacy efforts statewide (official website), partners with law enforcement agencies (official website), and offers services like complaint filing related to consumer fraud or civil rights issues (official website).
