USDA’s Rural Energy for America Faces Severe Cuts and Limitations on Solar Energy Deployments: I Agree with Cuts but Not with the Vindictive Implementation

       I have argued in the past that the USDA’s Rural Energy for America (REAP) program offered too much of a subsidy, at one time allowing up to 62% of a system to be paid by the federal government. The cost of solar energy is typically an upfront cost with slow payout times, although in recent years, with more efficient solar panels, the upfront costs have become more manageable, even with declining percentages of the standard rooftop solar credit, which went from 30% to 26% to 22% to zero. Of course, the drop to zero priced many out of the possibility. My complaint was mainly about in-town businesses benefiting from the program, particularly a restaurant business I occasionally went to that was clearly anti-fossil fuel, with bulletin boards full of anti-fracking literature and rhetoric by its owners. I would occasionally go there with my laptop and work on oil & gas “fracking” projects; little did they know. This was back in the 2010s. In any case, I think they were subsidized too highly at the time.

     On July 7, 2025, Trump signed Executive Order 14315, Ending Market Distorting Subsidies for Unreliable, Foreign Controlled Energy Sources. This included cuts to REAP, including a suspension of loan guarantees and cuts to grants. One complaint by the new administration’s USDA was that it also subsidized buying mainly Chinese solar panels and equipment, which dominate the market due it low price and big industry subsidization by the Chinese government, the CCP. The Trump USDA threw many USDA programs into chaos when it implemented a spending freeze that lasted months. Farmers that had already invested in projects that the government had already pledged to partner with had to wait and wonder whether they would be abandoned. They did eventually release funding, but it was a huge inconvenience. Many of those projects had to do with soil and water conservation that were demonstrably beneficial for farmers, the environment, and smart resource management.

     According to Grist:

“…in March 2026, the USDA effectively paused REAP as a whole, announcing it would suspend further grant awards until the program rules were rewritten to comply with Trump’s executive order from the year before.”

“This month, on October 1, the department published its final rule changes. They state that solar or wind projects on cropland involving “any component made in a country named as a foreign adversary” are no longer eligible for funding through REAP. Because so many parts of solar power systems are manufactured in China, this effectively means an end to any new solar development on farms through the once-popular USDA program.”

“Another change drags out the timeline for receiving funding; applicants must now have energy systems up and running for one year in order to be considered eligible for reimbursement.”   

     According to Utility Dive’s Ethan Howland:

“REAP was created in the 2002 Farm Bill to support energy efficiency and renewable energy projects. In August 2025, U.S. Secretary of Agriculture Brooke Rollins said the USDA would “no longer fund taxpayer dollars for solar panels on productive farmland” or allow solar panels “manufactured by foreign adversaries to be used in USDA projects.”

     A lawsuit filed by Earthjustice, the Environmental Law & Policy Center and Wolf River Electric, a solar installer, argues that the rules would affect farmers and rural small businesses with projects that had already been approved and had been encouraged to start construction. I disagree with the rule on this account. If those projects had previously been approved and started construction, they should be compensated as they thought they would be according to the agreements they signed.

“The USDA’s REAP announcement justified the policy changes saying that subsidized solar farms had made it “more difficult for farmers to access farmland by making it more expensive and less available.”

     This likely has to do with larger solar farms taking advantage of the program. I don’t think it is a real issue. There is plenty of farmland, and farmers can also practice agrivoltaics: farming or grazing under and around solar farms, which has proven to be effective in many cases and for certain crops and grazing animals such as sheep. While solar farms do “consume” some farmland, this argument by the USDA is mostly bogus and overblown. The cuts effectively change a program that was funding too much to one that is funding too little, a common example of the Trump administration’s vindictive approach.

“In 2022, through the Inflation Reduction Act, Congress appropriated $820.3 million for REAP for fiscal year 2022, and another $180.3 million a year through 2027, with unspent funds to be available until Sept. 30, 2031, according to the lawsuit.”

     Data shows that about 70% of REAP went to solar projects.

“Farmers and rural small business owners who invested time and money into the completion of grant applications under criteria announced by USDA, and who spent tens of thousands of dollars on the construction of solar projects based on assurances from USDA that they were eligible for REAP funding, now face steep monetary losses,” the plaintiffs said in their complaint.

     It sounds to me like they have a valid case. Why pull funding from projects already approved and under construction? That is vindictive for sure. The plaintiffs argue that the USDA’s anti-solar policy violates the Administrative Procedure Act, effectively countering Congress’ intent and adopting a retroactive application policy.

       

 

References:

 

Trump just effectively killed a popular solar energy program for rural America: Solar panels can be an economic lifeline for farmers. Now they're going to be a lot harder to build. Frida Garza. Grist. October 16, 2026. Trump just effectively killed a popular solar energy program for rural America | Grist

Ensuring Strong Stewardship and Customer Service in RBCS Guaranteed Lending & Other Programs. USDA. August 22, 2025. Ensuring Strong Stewardship and Customer Service in RBCS Guaranteed Lending

Lawsuit alleges USDA illegally slashed rural solar development program: Internal emails show a department administrator stating “let’s let the comms shop find . . . the rationale behind their statistics” when asked to substantiate anti-solar claims underpinning changes. Ethan Howland. Utility Dive. September 29, 2026. Lawsuit alleges USDA illegally slashed rural solar development program | Utility Dive