Dive Brief:
- The U.S. Department of Agriculture’s move a year ago to effectively stop providing grants and loans for solar projects through its Rural Energy for America Program is illegal and should be reversed, according to a lawsuit filed in federal court on Monday.
- REAP was created in the 2002 Farm Bill to support energy efficiency and renewable energy projects. In August, 2025, U.S. Secretary of Agriculture Brooke Rollins said the USDA would “no longer fund taxpayer dollars for solar panels on productive farmland” or allow solar panels “manufactured by foreign adversaries to be used in USDA projects.”
- The USDA’s actions were particularly harmful to farmers and rural small businesses with projects that had already been approved and had been encouraged to start construction, according to the lawsuit, which was filed by Earthjustice, the Environmental Law & Policy Center and Wolf River Electric, a solar installer, in the U.S. District Court for the District of Columbia. “Cash-strapped rural communities have been denied the benefits of additional cheap, reliable, and environmentally beneficial solar power during a period in which energy prices have reached historic highs,” the groups said.
Dive Insight:
The lawsuit marks the latest legal dispute in the Trump administration’s efforts to limit renewable energy development while promoting fossil fuels. Recently, two judges overturned the Environmental Protection Agency’s decision to cut its $7 billion Solar for All program.
The USDA’s REAP announcement justified the policy changes saying that subsidized solar farms had made it “more difficult for farmers to access farmland by making it more expensive and less available.”
The lawsuit says that when asked to substantiate those claims, the Rural Business-Cooperative Service administrator stated in an internal email, “let’s let the comms shop find . . . the rationale behind their statistics,” while another USDA staffer wrote that she hoped that program staff could “drum up something.”
During the Biden administration, solar farms consumed “fertile farmland that should be feeding America,” a USDA spokesperson told Utility Dive in an email Tuesday. “Those days are over. USDA will not actively participate in repurposing farmland historically used to sustain this country’s abundant food supply.”
In 2022, through the Inflation Reduction Act, Congress appropriated $820.3 million for REAP for fiscal year 2022, and another $180.3 million a year through 2027, with unspent funds to be available until Sept. 30, 2031, according to the lawsuit.
Nearly 70% of REAP grant and loan guarantee awards went to solar projects between 2011 and the first quarter of 2025, according to EL&PC.
In March, the department moved to formalize the changes through a rulemaking process. It also rescinded a previously issued funding opportunity notice for REAP in April.
At the same time, the USDA stopped processing all REAP grant applications, according to the lawsuit. The department said that all applicants — including those it had selected for funding — would need to reapply under the new rules before funding would be disbursed, the lawsuit said.
“Farmers and rural small business owners who invested time and money into the completion of grant applications under criteria announced by USDA, and who spent tens of thousands of dollars on the construction of solar projects based on assurances from USDA that they were eligible for REAP funding, now face steep monetary losses,” the plaintiffs said in their complaint.
They contend that the USDA’s anti-solar policy violates the Administrative Procedure Act, including by running counter to Congress’ intent and adopting a retroactive application policy.
Also, the USDA’s policy is “arbitrary and capricious” for various reasons, such as by failing to advance the department’s purported goals, according to the suit.
“Although defendants try to justify the Anti-Solar Policy as a break for taxpayers, the REAP loan guarantee program historically has cost the taxpayer nothing while generating government revenue,” the plaintiffs said.
