2026 REAP Program Status Update

As of March 31, 2026, the USDA has paused all REAP grant awards and application processing while new program regulations are being developed.

At this time:

– New REAP grant funding is not currently available
– Applications are not being reviewed or awarded
– Applicants without a fully executed agreement may need to reapply once the program reopens
– While grant funding is paused, REAP loan guarantees are still available, and alternative funding strategies

(including tax credits and structured financing) can still support energy projects.

– Our team is actively tracking updates and can help you position your project to move forward when funding resumes.

What This Means for Your Project

While REAP funding is temporarily paused, this does not mean your project has to stop.
Many producers are moving forward by:
– Leveraging federal tax credits (30% ITC)
– Structuring projects for cash flow-positive financing
– Preparing documentation now to be first in line when REAP reopens
We can help you evaluate your options and build a plan that works with or without grant funding.

Still Curious, Who qualifies for the REAP Grant?

Small Businesses

• Must be located in a rural area (Check Map)
• Must be classified as an SBA Small Business (Check the Table of Small Business Size Standards)

Agricultural Producers

• Direct production of agricultural products must make up at least 50% of gross income

Find out fast!

What projects qualify for the REAP Grant?

RES (Renewable Energy Systems)

• Solar Generation
• Biomass
  • Biodiesel and Ethanol
  • Anaerobic Digesters
  • Solid Fuels
• Wind Generation
• Geothermal
• Hydropower (below 30 megawatts)
• Hydrogen
• Ocean (tidal, current, thermal) generation

EEI (Energy Efficiency Improvements)

• High Efficiency HVAC Systems (heating, ventilation and air conditioning)
• Doors and windows
• Cooling or refrigeration units
• Insulation
• Lighting
• Switching from a diesel to electric irrigation motor
• Smart Thermostats & other energy management systems
• Electric, solar or gravity pumps for sprinkler pivots
• Replacement of energy-inefficient equipment

USDA REAP Grant Eligibility – Can I Get a Solar Grant or Loan?

If you’re interested in applying for a USDA REAP grant, the process is somewhat complex, but determining your eligibility is fairly easy.

There are five primary issues that determine who is eligible to apply for grant or guaranteed loan from the Rural Energy for America Program (REAP). We’ll walk you through each one, and then clarify a few additional common questions.

Just be aware that simply being eligible doesn’t guarantee you will win a USDA grant or loan. It is a competitive grant, and funding can change from year to year. Ag Solar has an outstanding track record of success in helping our customers apply for the REAP, with over $10 million successfully granted so far.

Type of business

Two types of businesses are eligible for a REAP grant or loan — agricultural producers and rural small businesses. There are a few eligibility criteria for each type.

Agricultural producers

Almost any farm that produces agricultural products and generates over half their gross, not just taxable income, from their agricultural operations is eligible to apply for a USDA grant or loan. As long as you meet the other requirements, farms can apply.

The REAP grant program was designed specifically for farms, as it is administered by the United States Department of Agriculture. So if you have a farm, you can probably apply.

One way to confirm this is if you use Schedule F when filing your taxes. If you file Schedule F, you are an agricultural producer.

Rural small businesses

In addition to agriculture producers, the REAP program is designed to help rural communities gain energy independence and save money through renewable energy. Solar power is one of the most cost-efficient and fast ways to start doing this.

Any business filing with a Form 1065 or Form 1120 qualifies as a rural business. As long as your business doesn’t exceed the size limitations that qualify it as small, you should be eligible for a USDA REAP grant or loan.

If your business operates out of your residence, you will most likely not qualify.

• To be even more detailed, here are the types of rural small businesses that can qualify for a REAP:
• Sole proprietorships, partnerships, or corporations that are private, for-profit businesses
• Cooperatives
• Electric utilities serving rural customers outside of direct government control – including Tribal utilities)
• Tribal corporations or businesses chartered under section 17 of the Indian Reorganization Act

Location of business

For agricultural producers, this is a non-issue, because your business is a farm.

But for rural small businesses, you must be operating in what is defined as a rural area. To confirm whether the government considers this to be true for your business, use this eligibility map.

As long as you’re located within an eligible rural area, your business should qualify for a REAP grant or loan. The USDA defines ‘rural’ as any area with a population of 50,000 people or less.

Use of electricity

Over half your electricity must be used to support the operations of your business. This applies to farms and rural small businesses. So if your farm has a personal residence on the same property, the electricity used by the residence will not count as part of that total. Electricity used for farm operations is all that counts.

Business finances and taxes

Whether a farm or a rural business, you cannot owe any back taxes and still be eligible for a REAP grant or loan. You also cannot have any delinquent debt or standing judgments or debarments.

So, to summarize these first four eligibility requirements, you should be able to apply for a USDA REAP grant or loan if you:

• Are a farm or a rural small business located in a defined rural area
• Use a majority of your electricity for business operations
• Are not delinquent on any taxes, debts, or judgments

If that describes your business, you can look at the final eligibility requirement.

Type of project

The USDA REAP was created to incentivize energy efficiency improvements and to construct renewable energy systems for rural communities, through farms and businesses. These tend to be some of the biggest energy-users in those areas. And that means they’re also spending the most money to pay for electricity.

So, it’s farms and rural businesses that stand to save the most on energy costs as well as generate the most electricity using renewable energy. Thus, these are the types of projects funded by the Rural Energy for America Program.

Your project must fall into one of two categories — renewable energy systems or energy efficiency improvements.

Renewable energy systems

For renewable energy projects, grant funding can range from $2500 to $1 million, up to 50% of the total eligible project costs. Eligible projects were listed earlier on this page. The main electric generation projects that most businesses might be able to incorporate include:

• Solar energy
• Wind generation
• Geothermal
• Biomass of several varieties

Ag Solar works exclusively with farms and rural businesses and helps them win REAP grants and loans to lower their solar installation costs. We do this because solar power has the simplest and fastest setup, and the fastest payback period.

Energy efficiency improvements

For energy efficiency projects, grant funds range from $1500 to $500,000, again up to half the total eligible project costs. For both types of projects, REAP loans can cover up to 75% of the total costs. Combined grant and loan guarantees can also make up 75% of the total eligible project costs, because you can apply for both types of REAP funds for the same project.

Eligible energy efficiency improvement projects include:

• Insulation
• High efficiency HVAC systems
• Doors and windows
• Smart energy management systems
• Lighting
• A few others listed earlier on this page

If you do win guaranteed solar loan financing through the REAP, there are underwriting requirements for the loan guarantee. These require a credit evaluation, financial or credit weaknesses, and other credit factors. More information about this can be found here on the USDA REAP grant web page.

A few other requirements

The same USDA page lists several other eligibility requirements. Here are some of the main ones.

Grant amount limits

To win the up to 50% grant, your proposed project must be a renewable energy system that produces zero greenhouse gas emissions. Or, it must be in an ‘Energy Community,’ be an energy efficiency project, or meet Tribal requirements. All other qualified projects can win only 25% grant funding.

For solar power installations, your project should meet the 50% requirement because it produces zero emissions.

Matching funds

If you apply only for a REAP grant, as opposed to a combined grant and loan, you must provide full matching funds for the project.

Keep in mind though that there are also federal tax incentives for installing a solar system. You will recover another 30% (at current rates due to the Inflation Reduction Act) of the project costs when you file your taxes. But you do need to have the cash when the project begins.

If you apply for loan guarantee funding, you must provide at least 25% of the project cost.

Other requirements, such as an environmental review and an energy audit, are listed on the same USDA government page.

How to Apply for a USDA REAP Grant or Loan

There are two ways to submit a grant application. The first is to do it yourself. Here’s the process:

• Get a UEI number by registering with the System for Award Management (SAM)
• Talk to a Rural Development State Energy Coordinator at your local state office
• Design your project and estimate costs, making sure it meets the REAP program requirements and standards
• For more information and resources, go to the USDA REAP website

As you can see, the process for applying is not simple.

That’s why option 2 is preferred by just about every farm or rural business applying for REAP grants or loans. The second option, if you want your project to be a solar installation, is to ask Ag Solar to help you with your application.

The list of successful REAP grant applications submitted with the help of our grant writers just keeps growing, and we are getting very good at it. We know how to meet all the requirements and how to position a project well, and our success rate is unparalleled. Get even more reap grant and load information.