USDA cuts REAP support for farm solar

Estimated reading time: 7 minutes · Last updated: 6 October 2026

The U.S. Department of Agriculture has rewritten eligibility for its Rural Energy for America Program (REAP) in ways that, plaintiffs say, will make most ground-mounted farm solar projects ineligible. The agency’s changes cut eligibility for ground-mounted solar on certified cropland and for systems that generate more than 50 kilowatts, and they require projects to be fully built, paid for and operating for at least a year before a farmer can apply. Nearly 70% of REAP awards from 2011 through the first quarter of 2025 were used for solar, a share the Environmental Law & Policy Center says the new rules would undo. The Environmental Law & Policy Center and Earthjustice have sued the USDA, as first reported by Iowa Public Radio.

They build these systems, and then suddenly they're being told by USDA, ‘Oh sorry, just kidding. You’re [going to] be denied because you didn't follow rules that did not exist when you applied,’

Chad Hughes, attorney with the Environmental Law & Policy Center

What the USDA changed and how the new rules work

The USDA announced a package of policy changes to REAP beginning with Secretary Brooke Rollins’s August 2025 statement that taxpayer dollars would no longer fund solar on prime farmland and that panels from “designated foreign adversaries” would be barred. Among the specific regulatory moves the agency finalized on Oct. 1, 2026 are cuts to eligibility for ground-mounted solar on certified cropland and a rule excluding systems that generate more than 50 kilowatts. The final rule also requires applicants to have built, paid for and operated projects for at least a year before applying for REAP funds and lowers the cap on individual grants while changing the program’s priority point system.

These changes reshape how and when rural businesses and farmers can use REAP. The one-year-in-operation requirement shifts REAP from an up-front support program to a reimbursement-style mechanism, which plaintiffs say defeats REAP’s original purpose of helping finance new capacity. The final rule’s text was posted in the Federal Register on Oct. 1, 2026 with a comment period; the rule summary explicitly extends many of the eligibility changes to wind projects as well.

Who is suing, and what they want the court to do

The Environmental Law & Policy Center and Earthjustice filed a lawsuit challenging the rule changes and their retroactive application. The complaint, filed by the two groups, asks the court to invalidate the USDA’s new eligibility criteria and to order the agency to process pending REAP applications under the rules that existed when those applications were submitted. Chad Hughes, an attorney with the Environmental Law & Policy Center, said plaintiffs invested time and money under prior rules and that retroactive enforcement will leave program participants on the hook for tens of thousands of dollars or more.

Earthjustice and the Environmental Law & Policy Center represent a mix of trade associations, farmer groups and developers. The Environmental Law & Policy Center represents the Iowa Farmers Union, the Iowa Solar Energy Trade Association, RENEW Wisconsin and Solar United Neighbors. Earthjustice represents plaintiffs that include Book Farms, the New York Solar Energy Industries Association, Wolf River Electric and two New Mexico consultancies, Clean Power Consultants and David Loney Consulting. The complaint targets both the substance of the eligibility cutoffs and the USDA’s decision to apply those changes to previously filed applications.

How many farms and dollars the changes touch

Project counts and dollar totals the USDA and advocates cite show why the rule matters to rural energy development. The Environmental Law & Policy Center’s review of USDA data found that nearly 70% of REAP awards between 2011 and Q1 2025 supported solar projects. Federal data cited in coverage show Iowa has been a major REAP recipient, winning $74.6 million in grants between 2014 and 2025. Those figures underline plaintiffs’ contention that the program has been an important channel for on-farm solar investment.

USDA research cited by the agency complicates the narrative on land use: a 2024 USDA analysis said 43% of solar farms and 56% of wind turbines in rural areas were installed on land that had been cropland prior to development between 2012 and 2020, yet it also found that less than 0.05% of U.S. farmland is used for utility-scale solar and wind. The combination — a high share of projects sited on previously cropped land but a tiny share of total farmland affected — is central to the policy dispute over whether REAP support on cropland is an improper use of taxpayer dollars.

Supply-chain and technical criteria that make compliance difficult

The USDA added a prohibition on using components from “designated foreign adversaries,” a restriction that plaintiffs say makes solar use impractical for many applicants. Chad Hughes highlighted that China manufactures over 80% of global solar panels, citing International Energy Agency data, and said that the manufacturing footprint makes the agency’s restriction a practical barrier to on-farm solar. The combination of a foreign-sourcing exclusion, a 50-kilowatt performance threshold and the one-year operating requirement narrows the set of projects that can realistically meet REAP rules.

The rule’s technical thresholds — a performance cutoff at 50 kilowatts and the one-year-in-operation condition — are mechanical gates rather than case-by-case policy judgments. That makes compliance binary for many applicants: projects that exceed the 50-kilowatt mark or that rely on supply-chain components the USDA designates may be excluded outright. The USDA also changed grant priority points and lowered individual grant caps, further altering the calculus for developers and farmers considering system scale, procurement and financing.

What this means for agrivoltaics and rural energy growth

The policy shift has immediate implications for agrivoltaics research and projects that combine crops and solar arrays. Iowa State University researchers growing strawberry cultivars at the Alliant Energy Solar Farm illustrate one use case; those pilot projects depend on a regulatory environment that lets farmers experiment with co-located production. Plaintiffs and trade groups argue that the new REAP rules will chill that experimentation by removing the predictable grant support that helped finance early projects.

Beyond research sites, plaintiffs warn the policy could slow capacity additions at a time they say energy prices are rising. Chad Hughes said that cutting REAP’s support “at a time when energy prices are soaring” removes a program designed to add grid capacity. The USDA’s extension of many changes to wind projects means the effects will not be limited to solar developers; rural developers and small businesses that relied on REAP for both technologies will face the same new eligibility constraints.

Case for and against reversal

The bottom line

The USDA’s Oct. 1, 2026 rule changes rework REAP away from the program its supporters say Congress intended: an on-ramp for rural energy investment. By cutting eligibility for ground-mounted projects on certified cropland, setting a 50-kilowatt performance threshold, imposing a one-year-in-operation requirement and tightening sourcing rules, the agency has narrowed who can use REAP. Plaintiffs led by the Environmental Law & Policy Center and Earthjustice ask courts to invalidate those criteria and to require processing under prior rules; the legal fight and the USDA comment period are the immediate paths that could reverse or soften the agency’s changes.

What to watch

• Watch for a court ruling or a scheduled hearing in the Environmental Law & Policy Center and Earthjustice lawsuit; no court date has been set.
• Watch for the close of the USDA’s comment period on the Oct. 1, 2026 final REAP rule; the published rule includes a comment period but gives no deadline in the rule summary.
• Watch for any amendment to the lawsuit after the Oct. 1, 2026 final rule; plaintiffs have said the complaint may be amended given the latest changes.

This article is information, not financial advice. Anyone acting on it should do their own checks.