USDA Freezes Farm Energy Grants as Solar Restrictions Stall $20M in Projects
March 16, 2026 · 2 min read
Jared Klein
The US Department of Agriculture's Rural Energy for America Program — the primary federal grant program helping farmers and rural businesses invest in renewable energy — remains frozen for FY2026 applications after Secretary Brooke Rollins imposed new restrictions on solar installations in August 2025.
What Changed
The REAP program provides grants up to $1 million and loan guarantees for renewable energy systems and energy efficiency improvements on farms and in rural businesses. The new restrictions specifically target ground-mounted solar systems larger than 50kW, deprioritizing them in the grant program and restricting them from the loan guarantee program.
While USDA frames the 50kW cap as affecting only 152 of 3,378 historical agricultural solar grants, the practical impact is far larger. Over 100 applications representing $20 million in projects remain stalled. The program has not accepted new grant applications since the FY2025 cycle, and the promised FY2026 window — originally set to open July 1, 2025 — never materialized.
Adding to the uncertainty, questions about whether grants can fund solar technologies manufactured outside the United States remain unresolved. Since 85% of US solar modules are imported, this ambiguity threatens the viability of nearly every solar REAP application.
The Timeline of Disruption
The troubles began January 20, 2025, when an executive order froze REAP funding alongside other renewable energy programs. Frozen funds began releasing in April 2025, but the June 2025 announcement that FY2026 applications would be paused — followed by the August restrictions — created a compounding uncertainty that has discouraged new applicants entirely. One farmer told the National Sustainable Agriculture Coalition they would "think twice about turning to USDA for help any time soon."
What Farmers and Rural Businesses Should Do
Guaranteed loan applications remain open, and energy efficiency improvement grants (non-solar) appear unaffected. Applicants with existing FY2025 applications should monitor the USDA Rural Development portal for processing updates. Those planning solar projects should explore state-level renewable energy incentives as alternatives. Granted can help identify state and utility programs that may fill the gap.
For ongoing coverage of REAP developments and alternative clean energy funding, visit the Granted blog.