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By AGDAILY Reporters Published: September 30, 2026
A coalition of farmers, rural businesses, and renewable energy groups is suing the U.S. Department of Agriculture over changes to a federal program that has helped agricultural producers finance solar and other renewable energy projects.
The lawsuit, filed Sept. 28 in the U.S. District Court for the District of Columbia, challenges the USDA’s changes to the Rural Energy for America Program, commonly known as REAP. Plaintiffs argue the department unlawfully restricted funding for solar projects and retroactively changed the rules for farmers and rural businesses that had already applied for or expected federal assistance.
The plaintiffs include the Iowa Farmers Union, Iowa Solar Energy Trade Association, New York Solar Energy Industries Association, RENEW Wisconsin, Solar United Neighbors, Wolf River Electric, Clean Power Consultants, David A. Loney Consulting, and several Illinois farmers and farming entities. The lawsuit names the USDA, Agriculture Secretary Brooke Rollins, the Rural Business-Cooperative Service, and its acting administrator, Victoria Collin, as defendants.
Congress created the program that eventually became REAP in the 2002 farm bill to support energy efficiency and renewable energy projects for agricultural producers and rural small businesses. Solar has accounted for a significant share of the program’s projects; according to the complaint, 68 percent of REAP grant and loan guarantee awards went to solar projects between 2011 and the first quarter of 2025.
The dispute traces back to August 2025, when the USDA announced new restrictions on solar projects receiving assistance through REAP.
At the time, Rollins said, “We are no longer allowing businesses to use your taxpayer dollars to fund solar projects on prime American farmland.” She also said, “We will no longer allow solar panels manufactured by foreign adversaries to be used in our USDA-funded projects.”
The USDA said subsidized solar development had made farmland more expensive and less available. The department’s August 2025 policy included restrictions affecting larger ground-mounted solar systems, projects on certain cropland, and projects containing components manufactured in countries designated as foreign adversaries.
The plaintiffs contend those restrictions conflict with Congress’ direction that REAP promote renewable energy development, including solar, for agricultural producers and rural small businesses. That argument has not yet been decided by the court.
The complaint also points to internal USDA emails obtained through public records requests as evidence in its challenge to the department’s rationale for the changes.
According to the filing, when reporters asked the USDA to substantiate claims about solar development and farmland, the Rural Business-Cooperative Service administrator wrote, “let’s let the comms shop find … the rationale behind their statistics,” while a USDA public affairs specialist wrote that she hoped program staff could “drum up something.”
The USDA has defended its broader shift away from supporting solar development on agricultural land.
“Those days are over. USDA will not actively participate in repurposing farmland historically used to sustain this country’s abundant food supply,” a USDA spokesperson told Utility Dive.
A central issue in the lawsuit involves producers and businesses that applied for REAP assistance before the USDA changed its policies.
In March 2026, the USDA announced it would stop making additional REAP grant awards while developing new rules. Previously submitted applications without fully executed financial assistance agreements would have to be resubmitted once those rules were established. USDA formally rescinded its previous funding opportunity in April.
That is particularly significant because REAP grants generally operate as reimbursements. Applicants can incur construction costs before receiving the federal money, according to the complaint.
The lawsuit cites an Iowa farmer who raises hogs and grows corn and soybeans as one example. He invested $256,064 in a 139-kilowatt rooftop solar project after applying for REAP funding. The project had been eligible for 50 percent reimbursement, but the USDA later informed him it would not process the application, according to the complaint.
Illinois farmers involved in the lawsuit also say they moved forward with solar installations after the USDA selected their projects for funding. One project had been selected for $185,328 toward a 178-kilowatt solar array, while another had been selected for $261,144 toward a 251-kilowatt array. Both were intended to offset energy costs associated with grain dryers.
“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 the complaint.
The lawsuit alleges the USDA’s policy violates the Administrative Procedure Act and conflicts with congressional requirements governing REAP. The plaintiffs are asking the court to set aside the policy and order the USDA to resume processing grant and loan guarantee applications submitted under the previous rules.
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