Maximize Your REAP Savings

Update, October 2026: USDA published a new REAP rule on October 1, 2026 (Federal Register document 2026-20178), and it takes effect October 16, 2026. The program now works very differently. A project must be fully built and running before you apply, and the application needs 12 months of actual production or savings data plus 12 months of data from before the installation. The largest grant request for a renewable energy system is $500,000, and the owner must cover at least 75% of project cost, so a grant pays for a quarter of the cost at most. The rule also favors systems sized to the operation and limits large ground mounts on cropland. Guaranteed loans are still available for up-front costs, though ground-mount solar over 50 kW is not eligible for them, and a grant and loan together cannot exceed 75% of project cost. USDA has not yet published the funding notice that will open applications under the new rule. The grant details below describe the program as it operated before these changes. New commercial and agricultural projects must be placed in service by December 31, 2027 to claim the federal credit, so for many farms the plan is now to build first, claim the credit, and apply for REAP after a year of operation. Talk to us about planning a project that way.

For agricultural businesses considering solar, the USDA REAP grant program is one of the most powerful tools available to reduce your installation costs. When combined with the Federal ITC and MACRS depreciation, REAP can help offset a substantial portion of your total project cost. Here's how to maximize your savings.

Step 1: Understand REAP eligibility. REAP grants are available to rural small businesses and agricultural producers. Your facility must be located in an eligible rural area, and the project must demonstrate energy savings or renewable energy generation. Delta Solar can help you determine your eligibility and prepare the necessary documentation.

Step 2: Stack your incentives. REAP grants can be combined with the 30% Federal ITC and 5-year MACRS accelerated depreciation. For example, a qualifying project could receive a REAP grant covering up to 50% of costs, plus a 30% tax credit on the full eligible cost, plus depreciation benefits, dramatically reducing your net investment. REAP grants are generally taxable income, and because they are taxed, they do not reduce the cost basis used for the tax credit or depreciation. The tax credit itself does reduce your depreciable basis by half the credit amount. Talk to your tax advisor about how that plays out for you.

Step 3: Apply early and apply strong. REAP is competitive, and strong applications require detailed energy assessments, financial projections, and technical documentation. Our team has extensive experience with REAP applications and can guide you through every step of the process to maximize your chances of approval and your total savings.