USDA REAP – An Overview of the Status and Benefits of The Program

What is REAP?

There is a lot of information and mis-information about the status of the Rural Energy for America Program (REAP). This article is intended to provide an update to and clarify the status of REAP.

REAP has made energy efficiency improvements and the implementation of on-site renewable energy systems accessible for rural small businesses and agricultural producers for over two decades. The program is administered by the United States Department of Agriculture (USDA) and was first introduced in the 2008 Farm Bill.

REAP is intended to serve as a pathway to increase domestic energy independence by reducing the cost burden for small businesses and agricultural producers to implement energy efficient improvements and renewable energy systems at their site. The program offers both guaranteed loan financing and grant funding for either energy efficiency projects or renewable energy systems to eligible entities.

Eligible energy efficiency improvement projects include:

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

Eligible renewable energy systems include:

• Biomass (for example: biodiesel and ethanol, anaerobic digesters, and solid fuels)
• Geothermal for electric generation or direct use
• Hydropower below 30 megawatts
• Hydrogen
• Small and large wind generation
• Small and large solar generation
• Ocean (tidal, current, thermal) generation

Typically, loan guarantees that cover up to 75 percent of total eligible project costs are available. However, for projects approved in Fiscal Year 2025, loan guarantees up to 80 percent of total eligible project costs are being offered. The grant terms for renewable energy systems outline a $2,500 minimum and $1 million maximum. For energy efficiency grants, there is a $1,500 minimum and a $500,000 maximum.  Currently, the USDA is maintaining the 50 percent cost share for eligible project costs for REAP grants. This may be reduced to 25 percent in Fiscal Year 2026, and it is recommended to check with the NC Clean Energy Technology Center for future REAP program updates. 

How Does New Guidance Impact Eligibility?

In August 2025, United States Secretary of Agriculture Brooke L. Rollins announced new restrictions on eligible funding for projects that implement ground-mounted solar arrays.  This change in policy reflects USDA’s concern that prime farmland should be used for food production and not energy production. The USDA Secretary’s policy specifically targets ground-mounted solar photovoltaic systems larger than 50 kW or those that cannot document historic energy usage. This latter restriction is intended to support projects that are “right-sized” for the site where these systems will be installed.

This action has immediate impacts on both REAP guaranteed loans and grant applications. This USDA announcement means that project applications that include ground mounted solar photovoltaic systems larger than 50kW will no longer be eligible for guaranteed loan funding, and/or priority points for REAP grants will not be awarded.

The only way for ground mounted solar photovoltaic systems to be eligible for guaranteed loan funding and/or to receive priority points in grant applications is if the system is lower than 50 kW and historical energy usage can be documented.

Priority points are awarded at the discretion of the State Director and Administrator. A maximum of 10 priority points may be awarded based on the technology, geographic location, and demographic of the applicant or population. This document outlines how applications are scored, and how priority points may be awarded.

Does New Guidance Affect Project Applicants Submitted Before the Ruling?

At this point, NCCETC has not been told if projects submitted before the new ruling will be grandfathered into the previous eligibility guidelines. Many projects that have already applied for funding have included ground mounted solar systems.

How Can an Applicant Document Historical Energy Usage?

NCCETC has assisted many agricultural producers and rural small businesses with renewable energy technical assistance to assist with REAP applications over the past several years. This work is funded by the USDA’s Renewable Energy Development Assistance (REDA) program and the USDA REAP Technical Assistance Grant (TAG) program.

NCCETC’s Clean Power and Industrial Efficiency (CPIE) team can identify appropriate renewable technologies and conduct energy assessments to determine generation potential, project cost, projected savings, and technology viability. NCCETC’s REAP Project Manager Art Samberg explains, “We start by conducting a utility bill analysis of the site to determine the quantity of energy that is consumed by either the small rural business or the agricultural producer. This typically involves review and analysis of the past 12-months of energy usage. This helps establish the “right-sizing” of a potential renewable energy system.  Installing a renewable energy system that is “right-sized” will typically maximize the system’s return on investment.” Learn more about how NCCETC has provided technical assistance that resulted in the approval of REAP applications.

When is the Next REAP Application Window?

On June 30, 2025, USDA Rural Development Deputy Under Secretary Todd Lindsay announced that applications would be paused from July 1, 2025 to September 30, 2025. This decision was made due to the overwhelming response and continued popularity of the program resulting in a backlog of applicants from fiscal year 2024. It was anticipated that USDA would begin accepting applications for REAP grants and guaranteed loans on October 1, 2025.  However, during the Federal government shutdown that started on October 1st, the USDA is not operating the program until further notice.

Looking Forward

Although new REAP guidance places restrictions on solar project implementation, this is not intended to convey that solar photovoltaic systems are no longer eligible for REAP grants or guaranteed loans. Funding applications for roof-mounted solar are not affected by the USDA announcement, and ground-mounted solar below 50kW and that document historic energy usage will also not be impacted.

Energy efficiency improvements are also impactful ways to reduce energy consumption and costs. Many energy efficiency improvements are eligible for REAP funding including insulation, lighting, HVAC systems, and more.

REAP funding has resulted in numerous energy transitions for small businesses and agricultural producers across the United States. Maintaining the longevity of this program will continue to benefit entities in rural areas and help to minimize operational costs. Learn more about the funding REAP has provided here.

Applicants looking to prepare for when USDA reopens the program, are welcome to reach out to NCCETC for technical assistance or application support. For more information, contact Art Samberg at asamber@ncsu.edu.

Los solicitantes que deseen prepararse para cuando el USDA vuelva a abrir el programa pueden comunicarse con el NCCETC para obtener asistencia técnica o apoyo con la solicitud. Para obtener más información, comuníquese con Art Samberg al correo asamber@ncsu.edu.