Groups representing farmers, solar installers and other organizations are suing the U.S. Department of Agriculture (USDA) after significant rule changes to the Rural Energy for America Program (REAP).
Congress created REAP over two decades ago to help farmers and small businesses in rural communities invest in renewable energy projects and pay for energy efficiency upgrades through USDA grants and loans.
According to USDA data obtained by the Environmental Law and Policy Center, nearly 70% of the awards from 2011 through the first quarter of 2025 were used for solar projects.
The Environmental Law and Policy Center and Earthjustice recently filed a lawsuit against the USDA in response to the agency’s new eligibility requirements.
The groups claim the USDA has essentially made all solar projects ineligible for REAP funding, which they argue is illegal because it undermines the intent of Congress. They also argue the USDA broke federal law by applying these changes retroactively, leaving program participants on the hook for tens of thousands of dollars or more.
Chad Hughes is an attorney with the Environmental Law & Policy Center, which is representing the Iowa Farmers Union and other groups in the lawsuit.
During an Iowa Farmers Union webinar Thursday, Hughes said participants in REAP followed the USDA’s rules and invested significant time and money into solar projects.
“They build these systems, and then suddenly they're being told by USDA, ‘Oh sorry, just kidding. You’re [going to] be denied because you didn't follow rules that did not exist when you applied,’” Hughes said.
The lawsuit specifically asks the court to invalidate the USDA’s new eligibility criteria and to order the agency to process REAP applications under the rules USDA had in place when they were received.
Aaron Lehman, president of the Iowa Farmers Union, called the USDA’s actions “a total betrayal” to farmers during the webinar.
“Iowa farmers have really benefited from this program,” Lehman said. “We've been a leader in the usage of this program for rural energy in the country.”
According to federal data, Iowa is one of the largest recipients of REAP grants, with $74.6 million between 2014 and 2025.
The administration turns on solar
After a federal funding freeze affected REAP for several months last year, Secretary of Agriculture Brooke Rollins in August 2025 announced plans to change the program’s policies.
“We are no longer allowing businesses to use your taxpayer dollars to fund solar projects on prime American farmland, and we will no longer allow solar panels manufactured by foreign adversaries to be used in our USDA-funded projects,” Rollins said in a statement.
The press release said solar panels on farmland had increased by nearly 50%.
According to a 2024 USDA report, “43 percent of solar farms and 56 percent of wind turbines in rural areas were installed on land that was in cropland prior to development” between 2012 and 2020. However, the report also said less than 0.05% of U.S. farmland is used for utility-scale solar and wind.
The USDA established new criteria to qualify for the agency’s REAP loans. Among the changes, the USDA cut eligibility for ground-mounted solar projects on certified cropland and systems that generate more than 50 kilowatts of energy.
Hughes said disqualifying solar systems that use components from “designated foreign adversaries” also makes it “very difficult for anybody to use solar on their farm.” China manufactures over 80% of all solar panels.
The USDA also said it would change the priority point system for grants.
Then in March 2026, Hughes said the USDA announced the rule changes would apply to all previously received applications.
On Oct. 1, 2026, days after the Environmental Law and Policy Center and Earthjustice filed the lawsuit, the USDA issued a final rule for REAP with a comment period. Among the changes, projects must be fully built, paid for and operating for at least a year before a farmer can apply for funding.
The USDA also lowered the cap on individual grants and expanded many of the rule changes to wind projects.
Hughes said the agency’s actions are counter to the purpose of the program and the need for more energy development.
“At a time when energy prices are soaring, you're taking away a program that's meant to add capacity to the grid,” he said.
The current lawsuit may be amended, given the latest changes to REAP, Hughes said.
The Environmental Law & Policy Center represents the Iowa Farmers Union, the Iowa Solar Energy Trade Association, RENEW Wisconsin and Solar United Neighbors.
Earthjustice represents the Illinois-based Book Farms, the New York Solar Energy Industries Association, Minnesota-based solar developer Wolf River Electric and two New Mexico based renewable energy consultancies, Clean Power Consultants and David Loney Consulting.
