USDA has not ended grants for farm solar, but its October 2026 final rule makes several projects ineligible and requires renewable-energy systems to be operating before applicants seek funding. Effective October 16, 2026, the rule adds tighter requirements for project location, energy-use records, component origins, ownership and timing. A project that remains eligible still must compete for limited funds.
What USDA’s October 2026 rule changes
The Rural Energy for America Program (REAP) offers eligible agricultural producers and rural small businesses grants and guaranteed loans for renewable-energy systems and energy-efficiency improvements. USDA’s October 1, 2026 final rule revises the program’s grant regulations and takes effect October 16, 2026. The rule’s public comment deadline is November 2, 2026. See the final rule and USDA announcement for the published requirements and agency explanation.
For renewable-energy system grants, the rule excludes solar photovoltaic and wind systems installed on certified cropland, systems that cannot document commensurate historical energy use, and systems containing any component made in a country designated as a foreign adversary under the cited federal definition. USDA says projects must be fully built and operational before application. Applicants must provide 12 months of actual energy-generation or savings data at application, along with pre-installation information.
The regulation also limits applicant eligibility to the highest-level owner, narrows or clarifies eligible project configurations, and makes multilocation projects and specified technologies ineligible. Its treatment of a particular project depends on the final regulatory text and current USDA guidance.
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What applicants need to establish
Before relying on a REAP grant to finance a solar project, work through these requirements. An apparently suitable system can still fail on land status, documentation, ownership or timing.
- Check the land classification. Determine whether the proposed site is certified cropland under the relevant rule. The exclusion applies to solar PV and wind systems installed on certified cropland.
- Document energy use. Assemble records showing historical energy use commensurate with the proposed system. The rule requires 12 months of actual energy generation or savings data at application, as well as pre-installation information.
- Trace component origins. Verify the country of origin of every relevant solar or wind component. A system containing any component made in a country designated as a foreign adversary is excluded under the rule.
- Confirm completion and operating history. The project must be fully built and operational before applying. Plan for the required performance data rather than assuming an award can fund a system that has not yet been installed.
- Check who applies. Confirm that the applicant is the highest-level owner eligible under the revised rules, and that the project configuration is eligible.
- Read the current funding notice. Check application dates, scoring priorities and available funding in the applicable USDA notice. The final rule does not establish that an application window is open now.
Projects already in process may have a transition path
A project with a Form 1940-1 signed by both the applicant and USDA before October 16, 2026, may continue through processing if it remains consistent with applicable terms and conditions. Applicants in that position should confirm their project’s status and governing terms with USDA rather than assuming the new requirements do or do not apply.
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Eligible does not mean funded
REAP remains competitive. The final rule states, “Projects compete based on score, and funding to support all eligible applications is not guaranteed.” USDA says annual program notices will provide application dates and further details, so a project must meet the rules and compete under the relevant notice and available funds.
How the October 2026 rule differs from USDA’s 2025 action
USDA’s August 19, 2025 announcement addressed the REAP Guaranteed Loan Program: ground-mounted solar PV systems larger than 50 kW and systems unable to document historical energy use would no longer qualify for those guaranteed loans, and those projects would lose grant priority points. The agency separately said wind and solar projects were ineligible for the USDA Business and Industry Guaranteed Loan Program. Those 2025 loan and priority provisions should not be confused with the October 2026 final rule’s grant eligibility requirements. See USDA’s 2025 announcement for its account of that action.
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Richa Patel, a policy specialist at the National Sustainable Agriculture Coalition, told The Associated Press and Grist that REAP had provided more than 19,000 grants totaling more than $1.8 billion since the program began. The reporting does not specify an exact cutoff date for that cumulative estimate, so it should be understood as Patel’s reported figure, not a dated USDA administrative count. The same reporting described a $30,576 grant awarded in 2024 to Maryland farmer Elisa Lane; payment was delayed and later reimbursed. That individual award is not a typical grant amount. See The Associated Press and Grist’s reporting.
USDA says the rule is intended to simplify the process and focus support on appropriately scaled, on-farm systems. Under Secretary for Rural Development Glen R. Smith said in the agency’s October 2, 2026 announcement: “This rule cuts the red tape so that farmers and rural small businesses can spend less time and money navigating paperwork and more time investing in their operations.” For applicants, the immediate practical task is to check the final rule’s requirements against the project before building a budget around a grant.
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