REAP Grant Program: Current Status and What to Expect

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.

The USDA Rural Energy for America Program (REAP) is still law and still has money, including unspent Inflation Reduction Act funds that Congress did not take back. But USDA is not awarding grants until its new rules are final, and Congress has not yet passed a new farm bill. That said, the landscape around REAP has shifted in ways that rural businesses and farms need to understand before building a project plan around grant support.

Delays and Uncertainty

The FY2026 grant window never opened, and the timeline for new awards is less predictable than it has been in years. Ground-mount solar has also been hit directly. In August 2025, USDA stopped giving REAP grant priority points to ground-mount solar over 50 kW and made those projects ineligible for REAP guaranteed loans. It also said it will not fund solar on productive farmland or panels made by foreign adversaries. The new rules may tighten this further. Rooftop systems and smaller ground mounts are less affected, but anyone planning a larger ground-mount array should not count on REAP.

50% or 25% Cost-Share

You may have seen REAP grants quoted at both 50% and 25% of project cost. That difference comes from the funding source, not a pending cut. Under the last funding notice, grants paid from Inflation Reduction Act money could cover up to 50% of costs for solar, while the base program caps grants at 25%. That notice was canceled in 2026, so the new rules will set the limits going forward. For a smaller operation expecting the grant to carry a large share of the upfront cost, that difference changes the economics. Guaranteed loans remain available and may be a more stable path for some applicants, depending on the project and the borrower's financial position.

What This Means for Planning

None of this means rural businesses should stop thinking about solar. It means the planning needs to account for a wider range of outcomes. Projects that pencil only if the full 50% grant comes through are riskier than they were a year ago. Projects that work at 25% or without the grant entirely are on firmer ground. The strongest approach is still to build the project around real energy economics first and treat REAP as an accelerator rather than a requirement.

If you are a rural business or farm evaluating solar, the right move is to structure the project so it holds up regardless of where REAP lands. Run two scenarios in parallel: one with a grant, one without, and ask which decision you would still be comfortable with in either case.