Farmers, Others Sue USDA Over REAP Solar Restrictions, Funding Losses
OMAHA (DTN) — Electricity prices and other energy costs keep rising, but USDA has severely restricted one of the biggest tools farmers and small rural businesses have had to produce solar power on their farms to offset costs, according to a new lawsuit.
Farmers in Iowa, Illinois and Wisconsin, along with solar energy groups, filed a lawsuit Monday in the U.S. District Court for the District of Columbia, suing USDA and department officials over changes to the Rural Energy for America Program (REAP) that plaintiffs argue were done to effectively block funding for nearly all on-farm solar projects.
The farm and renewable energy groups are represented by attorneys for Earthjustice and the Environmental Law & Policy Center.
The lawsuit alleges USDA violated the Administrative Procedure Act by taking actions that conflict with farm bill statutes spelling out how USDA should administer REAP. USDA’s actions directly affected farmers and others who followed USDA’s guidelines when applying for REAP funds and had their projects approved. The lawsuit argues USDA abused its agency discretion in awarding REAP funds and undermined the overall goals of the program set by Congress.
The lawsuit asks the court to vacate USDA’s “anti-solar” policies and require the department staff to again process applications under rules in place when they were submitted, as well as fund farmers who had their grants or loan awards rescinded retroactively.
REAP was set up to provide loans and grants to farmers and rural businesses specifically to fund renewable energy projects and energy efficiency upgrades on their operations.
According to the lawsuit, 68% of REAP awards were used for solar projects from 2011 through the first quarter of 2025.
“REAP funding for solar projects is in high demand because many farmers and rural businesses rely on federal support to help cover the upfront costs to install solar systems, which provide income and energy cost savings over their useful installed lives,” the complaint states.
AFTER EXECUTIVE ORDER, USDA CHANGED SOLAR POLICIES
President Donald Trump signed an executive order in July 2025, “Ending Market Distorting Subsidies for Unreliable, Foreign-Controlled Energy Sources.” Trump’s order focused on renewable energy tax credits through the Treasury Department and programs at the Department of the Interior but does not mention USDA programs.
Still, USDA leaders cited the order to direct Rural Development to reduce taxpayer support for “green” energy, declaring solar and wind as “unaffordable and unreliable” sources of power that are “controlled by foreign adversaries.”
In August 2025, USDA announced it would change REAP’s rules for loans and grants to restrict eligibility for certain solar projects. New restrictions capped ground-mounted solar photovoltaic systems at 50 kilowatts, while also tightening eligibility for projects that could not document historical energy use, projects on certified cropland, and systems using components from designated foreign adversaries. The department also changed how solar projects would be treated in scoring REAP grant applications.