USDA Keeps Freeze on REAP     04/01 15:57

   USDA Halts REAP Grant Applications as Rising Energy Costs Squeeze Farmers 

   The Trump administration has frozen grant applications under the Renewable 
Energy for America Program because the Trump administration is pressing to curb 
subsidies for projects using solar, wind and other renewable energy sources. 
REAP is a popular program that largely funds only small-scale projects such as 
rooftop solar on barns or more energy-efficient irrigation systems. 

Chris Clayton
DTN Ag Policy Editor

   This article was originally posted at 3:05 p.m. CDT on Wednesday, April 1. 
It was last updated at 3:57 p.m. CDT on Wednesday, April 1.

   **

   OMAHA (DTN) -- As rural energy costs continue to climb, USDA has halted 
grant applications for the Renewable Energy for America Program (REAP) while 
the department rewrites program rules to comply with an executive order by 
President Trump last year aimed at cutting subsidies for renewable energy 
projects.

   A popular program, REAP provides grants and loans to farmers and small 
businesses in rural communities to improve energy efficiency and reduce their 
long-term energy costs.

   In a stakeholder announcement on Tuesday, USDA announced the department 
would update its regulations on REAP to comply with Trump's Executive Order 
from last July called, "Ending Market Distorting Subsidies for Unreliable, 
Foreign Controlled Energy Sources." USDA stated there would not be any further 
REAP grants "until the new regulations are in effect." Once new rules are 
finalized, USDA stated the department would issue a new funding notice "and any 
applicants who previously submitted an application will have the opportunity to 
reapply."

   The Trump administration announced in March 2025 it would unfreeze 
previously obligated REAP funds awarded under the Biden administration, but 
USDA officials have not awarded any new REAP grants since taking office. While 
grants have been halted, USDA stated in its notice that the department would 
continue to accept applications for REAP guaranteed loans.

   In a comment to DTN, a USDA spokesperson stated: "Bringing regulations in 
line with the Trump administration's priorities to end market-distorting 
subsidies for unreliable, foreign-controlled energy sources is a top priority 
for the USDA. Although no immediate timeline is available, issuing the new 
regulations is a top focus as we work tirelessly to support our American 
farmers, rural small businesses, and partners. A new Notice of Funding 
Opportunity will be published in accordance with the new regulations once they 
are effective."

   Environmental and small-farm organizations criticized the decision to freeze 
REAP grants until new rules are written.

   "As the nation struggles with rising energy costs, USDA just announced its 
failure to implement an existing program specifically designed to help farmers 
and rural small businesses save on energy costs," said Matt Ohloff, a policy 
advocate for Environmental Law & Policy Center. "REAP is a popular program that 
has received bipartisan support for over 20 years and has a long track record 
of success. Failing to implement this program is only creating more hardship 
and uncertainty for farmers and rural small businesses."

   The National Sustainable Agriculture Coalition also pointed out that farmers 
are facing increased financial pressures and REAP is focused on reducing energy 
costs.

   "At a moment when farmers and rural small businesses face converging 
financial pressures, bringing the Rural Energy for America Program to a 
standstill only increases that pressure. Countless small businesses have 
invested significant time and resources in this popular, bipartisan program to 
reduce their energy costs. USDA should implement the REAP program as quickly as 
possible and provide more clarity on when farmers can expect the program to 
resume," said Richa Patel, an NSAC policy specialist.

   Agriculture Secretary Brooke Rollins last year announced USDA would not use 
taxpayer dollars to fund solar projects that displace farmland. Yet REAP funds 
small-scale projects that would not be large enough to take farmland out of 
production for power generation.

   The House version of the farm bill, which has yet to see a floor vote, 
includes language that would allow USDA Rural Development funds for solar 
panels on five acres without any restrictions, or allow solar on up to 50 acres 
if most of the power generated is used on the farm.

   Trump's executive order, issued last July, criticized "so-called 'green' 
subsidies" for displacing "affordable, reliable, dispatchable domestic energy 
sources" as well as compromising the grid. The order also argues that renewable 
energy threatens national security by relying heavily on foreign supply chains. 
"Ending the massive cost of taxpayer handouts to unreliable energy sources is 
vital to energy dominance, national security, economic growth, and the fiscal 
health of the Nation," the executive order stated.

   REAP has historically been a small loan program funded in the farm bill, but 
the program received $1.7 billion under the Inflation Reduction Act in 2022 
that included allowing for grants of up to 50% of total project costs.

   Under the Biden administration, farmers and rural business owners who wanted 
to build renewable energy systems such as wind, solar, biomass, and methane 
digesters could receive up to $1 million for their projects. USDA held 
quarterly grant awards in 2023 and 2024 for such projects.

   To qualify, a farmer had to show at least 50% of their gross income was 
derived from agriculture. Small businesses had to be located in communities 
with fewer than 50,000 people and show their net worth was under $15 million.

   In October 2024, the Biden administration provided $126 million in REAP 
grants for 654 renewable energy projects across 39 states along with Puerto 
Rico and Guam. A large number of those grants involved installing solar on 
barns, poultry houses and other small businesses. Some of the grants also 
allowed farms to install more energy-efficient irrigation systems such as 
replacing diesel engines with electric motors.

   Meanwhile, electricity costs nationally have risen by nearly 10% in the past 
year, driven in part by the development of heavy energy usage tied to the 
explosion of data centers across the country. Diesel prices have also spiked 
46% since the war in Iran began at the end of February.

   Chris Clayton can be reached at Chris.Clayton@dtn.com

   Follow him on social platform X @ChrisClaytonDTN




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