USDA’s changes to Rural Energy for America Program (REAP) will limit farmers’ access to grant program as energy costs soar

WASHINGTON, D.C. — U.S. Senator Peter Welch (D-Vt.), Ranking Member of the Senate Agriculture Subcommittee on Rural Development, Energy, and Credit, and U.S. Senator Tina Smith (D-Minn.), a member of the Senate Agriculture Committee, led 19 of their Senate colleagues in calling on the U.S. Department of Agriculture (USDA) to reverse major changes to the Rural Energy for America Program (REAP) which would require farmers to make a substantial upfront investment to secure grant funding. 

In their letter to USDA Secretary Brooke Rollins and Rural Business-Cooperative Service Administrator Gimmie Jansonius, the Senators emphasize that USDA’s new rule goes against the intent of the REAP program, which is vital to incentivizing and supporting renewable energy projects that farmers might not otherwise have the capital to undertake. The Senators also underscore how the new rule would limit access to this important program at a time when energy costs are soaring. 

“REAP is an incredibly successful and popular program. In the last ten years, USDA has invested more than $1.6 billion dollars in REAP grants across all fifty states, helping over 10,000 agricultural producers and rural businesses reduce their energy costs, improve energy efficiency, and promote energy independence. The program supports a wide range of projects, including installing solar panels, purchasing energy efficient equipment, and making upgrades to meet energy efficiency codes,” wrote the Senators. 

“The final rule issued on October 1, 2026, represents a significant departure from the program’s longstanding structure. Under the new rule, USDA requires projects to ‘be fully built and operational’ before an applicant can apply for assistance and the applicant must provide ‘actual energy production or savings data for the prior 12 months, alongside 12 months of pre-installation data.’ This change goes against the intent of the REAP program—to incentivize and support projects that farmers might not otherwise have the capital to undertake,” the Senators continued. “Many farmers and small rural businesses cannot afford to finance the upfront costs without any guarantee that they will be reimbursed for their investment. Rather than incentivizing projects that might not otherwise occur, the rule risks limiting financial support to applicants able to finance projects independently. The new rule also narrows the size and scope of eligible projects, increases administrative burdens for applicants, and imposes strict supply chain restrictions.” 

The Senators concluded: “USDA issued the final rule prior to a public comment period. While we understand USDA’s authority to do this under the Administrative Procedure Act, stakeholder input is critical to ensuring that federal programs are implemented effectively. We urge USDA to demonstrate its commitment to meaningful engagement by considering stakeholder feedback and making appropriate revisions to ensure producers and small business owners are able to upgrade their energy systems to make them more efficient and affordable.” 

The Senators requested a Congressional staff briefing on the major changes to the program no later than October 31, 2026, and asked for a written response to the following questions by November 5, 2026: 

1. Congress intended for REAP to, in part, help producers and small businesses purchase a renewable energy system (RES). What language under 7 U.S.C. § 8107 permits USDA to shift REAP from a financial assistance program for the purchase of a RES to a reimbursement program for a completed RES that has been operational for 12 months? 
2. Has USDA estimated how many applicants will meet the new eligibility criteria announced in the final rule? Does USDA expect the final rule to increase or decrease the number of farmers and rural businesses served by REAP?  
3. Has USDA estimated how the rule change will affect the size of farms and enterprises that will apply? How will USDA ensure that the rule change does not disadvantage small and family-owned farms and rural businesses?  
4. The final rule states “This revision streamlines, simplifies, and reduces burden for the application process.” Please provide additional details on how this rule achieves these goals, and how it compares to the administrative requirements under the previous program structure.  
5. Please provide documentation of the feedback USDA received about REAP before issuing the final rule, including the number of emails, calls, and in-person conversations considered (as mentioned on page 62600 of the final rule), the names of the stakeholders and others that provided feedback to USDA, and whether USDA considered the feedback they received to reflect a diverse range of perspectives.  
6. Why did USDA decide to change the structure of the program to a reimbursement model? What evidence or data did the agency use to back up the need for this change? 
7. How many farmers and businesses were eligible under the previous rule and procedures that no longer are able to meet the new requirement to pay 100% of the costs upfront? What portion of these potential applicants cannot obtain a private loan? Does the agency have a plan to provide an opportunity to apply prior to completion of the project for these individuals? 
8. The new rule eliminates state level competition for awards, which potentially may limit the role of state energy coordinators, who have historically contributed local expertise to the award process. What role will state energy coordinators have under the new rule, and how will USDA ensure that local needs are considered in funding decisions?  
9. USDA Rural Development has lost over 2,000 employees since 2024. Does USDA have sufficient staffing capacity to implement these changes effectively? 
10. REAP has not distributed any grant awards in over six months, how much funding is available in the REAP program? Provide the breakdown between funding from the Farm Bill and the Inflation Reduction Act (IRA). 

Senators Welch and Smith were joined by Senate Agriculture Committee Ranking Member Amy Klobuchar (D-Minn.) and Sens. Cory Booker (D-N.J.), Chris Coons (D-Del.), Mazie Hirono (D-Hawaii), Ed Markey (D-Mass.), Jeff Merkley (D-Ore.), Bernie Sanders (I-Vt.), Jeanne Shaheen (D-N.H.), Angela Alsobrooks (D-Md.), Richard Blumenthal (D-Conn.), Martin Heinrich (D-N.M.), Adam Schiff (D-Calif.), Chris Van Hollen (D-Md.), Ron Wyden (D-Ore.), John Fetterman (D-Pa.), Dick Durbin (D-Ill.), Angus King (I-Maine), Rev. Raphael Warnock (D-Ga.), and Michael Bennet (D-Colo.). 

Read and download the Senators’ full letter to Ag Secretary Rollins and Rural Business-Cooperative Service Administrator Jansonius. 

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