October 01, 2026
WASHINGTON, D.C., Oct. 1, 2026 – The U.S. Department of Agriculture today published a final rule overhauling the Rural Energy for America Program (REAP) that will lock most farmers and rural small businesses out of solar and wind energy, days after the Environmental Law & Policy Center and Earthjustice sued USDA over its treatment of REAP applicants.
USDA issued the rule without the notice and public comment that normally precede major regulatory changes, claiming an exemption for grant programs. It takes effect in 15 days. USDA is accepting comments for the next 30 days.
“The new rule is terrible policy and is plainly unlawful,” said Jessica O’Donnell, Senior Attorney at ELPC. “USDA is now targeting solar and wind in an express effort to promote its new fossil fuel agenda. That is completely antithetical to the REAP statute, which requires USDA to promote renewable energy, expressly including solar and wind projects.”
REAP was created by Congress to help farmers and rural small businesses cut energy costs. According to USDA Rural Development data cited by the National Sustainable Agriculture Coalition, 72% of all REAP grant projects are solar. The new rule targets that core use directly. USDA’s own text says the changes follow department policies directing it to “disincentivize solar development on farmland” and repeatedly invokes a July 2025 executive order attacking what it calls “unreliable” energy sources.
Under the new rule, farmers must fully build and pay for projects, which need to be operational for 12 months, before applying for REAP funding. Also all ground-mounted solar and wind projects are outright banned, which runs contrary to the REAP statute.In addition, competition for REAP funds – which previously was conducted within each state – will now be one national competition, which weakens to voice and influence of leading states such as Iowa, Minnesota and Illinois.
“At a time rural America struggling with soaring costs, USDA is adding even more roadblocks to a highly successful, bipartisan program that has helped farmers and rural small businesses lower costs, increase revenues, and reduce emissions for decades.” said Chad Hughes, Senior Associate Attorney at ELPC. “USDA is knowingly undermining the purpose of the program because many farmers are not in a position to invest tens of thousands of dollars in a renewable energy system without knowing that they will be partially reimbursed. Under this rule, REAP will only help those who can afford to entirely finance their energy efficiency projects and then wait a year for the mere possibility of being reimbursed.”
The rule also formalizes USDA’s abandonment of farmers who applied under the old rules. Many farmers who spent months and thousands of dollars preparing applications before USDA halted processing on March 31 must start over under the new restrictions. USDA’s rule acknowledges “concerns expressed by recent applicants” and offers them only the chance to resubmit, if their projects can meet requirements that did not exist when they originally applied.
The program has been effectively frozen for a year. USDA has not committed a single dollar to REAP for renewable energy projects since September 2025, according to a recent Associated Press and Grist analysis of USDA data.
A solution to a problem that doesn’t exist
USDA claims REAP solar projects are displacing cropland, but it offers no data to back that up. The rule cites only feedback, USDA says it “received through the normal course of business in person or through phone calls and emails.”
The actual numbers tell a different story. Solar occupies just 0.07% of U.S. farmland, according to the Solar Energy Industries Association, and golf courses take up nearly three times as much prime farmland as solar does.
By comparison, about 60 million acres of U.S. farmland – almost a quarter of all planted acreage, grow crops for fuel – driven largely by the EPA’s Renewable Fuel Standard, according to the World Resources Institute. Solar is at least 70 times more land-efficient at producing transportation energy than corn ethanol, according to an analysis cited by Earthjustice. USDA accepts tens of millions of acres of fuel crops, yet treats a sliver of land for solar as a threat to American agriculture.
Solar also helps keep farms in business. In Illinois, solar land leases average $900 per acre, more than three times the $269 average for a conventional land lease, according to Clean Grid Alliance. “Iowa farmers use solar to keep their operations running when margins are razor thin. USDA is taking that tool away and leaving the farmers who trusted this program holding the bill,” said Matt Russell, Executive Director, Iowa Farmers Union.
Kyle de Beausset, an 8th generation owner of Westcroft Gardens & Farm in Michigan, said it is unlikely his family would have pursued a $120,000 rooftop solar project under the new rule.
“We’re incredibly grateful that our funding was recently restored under the old process. For a small family farm like ours, knowing that we will receive some reimbursement at the end of the project is what makes it possible for us to move forward,” he said. “If we had been required to pay for the entire project upfront, operate it for a year, and only then apply without knowing whether we would receive any reimbursement, it’s a risk that’d be extremely difficult to take when there’s already enough risk inherent in operating a farm. I worry this change will put projects like ours out of reach for many of the small farms and rural businesses REAP is intended to help.”
Veronica McFadden, owner of Sun Grants Consulting in Iowa, which works with farmers and rural small businesses on REAP projects, said the new rule runs counter to the program’s intention altogether.
“Farmers and rural businesses did exactly what USDA asked them to do. They followed the rules, invested time and money in their projects, and applied in good faith. Now USDA is changing the rules and leaving those applicants behind. Farmers can’t control commodity prices, fertilizer or fuel costs, but renewable energy gives them a way to control one significant operating expense for decades. REAP was created to help farmers make those investments—not put them further out of reach,” said McFadden.
The rule will be open for public comment 30 days after publication, though it takes effect before comments close. Anyone wishing to comment can do so at regulations.gov by searching for Docket No. RBS-26-Business-0529 and clicking “Comment.” All comments are posted publicly without changes, including any personal information.
Background: ELPC and Earthjustice filed suit on Sept. 28 on behalf of the Iowa Farmers Union, RENEW Wisconsin, Solar United Neighbors, the Iowa Solar Energy Trade Association, and farmers and solar installers, challenging USDA’s anti-solar eligibility criteria and its refusal to process applications under the rules in place when they were submitted.