| |
USDA Keeps Freeze on REAP 04/01 15:05
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
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.
USDA added, "These changes reflect our commitment to ending the massive cost
of providing taxpayer handouts for unreliable energy sources and follows
Administrative priorities of energy dominance, national security, economic
growth, and the fiscal health of the nation."
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 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 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 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 also have 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
(c) Copyright 2026 DTN, LLC. All rights reserved.
DTN offers additional daily information available free through DTN Snapshot – sign up today.
|
|
