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USDA said a new rule will simplify and streamline requirements and processes for Michigan farmers and small businesses seeking Rural Energy for American Program (REAP) grants for renewable energy systems and energy-efficient upgrades.
On Thursday, USDA’s Rural Business-Cooperative Service published the REAP final rule with a 30-day comment period, noting the new approach changes the program to a “post-completion, performance-validated model.”
That means REAP projects must be built and operational for a year before a producer or business can apply. Applicants must also submit energy production or savings data for the previous 12 months, and 12 months of pre-installation data.
The rule also states that solar panels installed on cropland are not eligible for the program.
REAP projects include purchasing, installing, and/or constructing solar energy systems, wind turbines, and anaerobic digesters for farms and rural businesses. Producers can also use funds to update heating, ventilation and air conditioning systems, and energy-inefficient equipment. The program currently provides guaranteed loan financing, including on loans up to 75% of total eligible project costs, grants for up to 50% of total eligible costs, and combined grant and loan guarantees funding up to 75% of total eligible project costs.
Michigan led the nation in REAP grant funding for fiscal year 2025 at $47.6 million, according to Dom Restuccia, state director for Rural Development in Michigan, and “it is our goal to be No. 1 in fiscal year 2027.”
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“It was a priority of the administration to make sure that the program was in alignment with our national security considerations,” Restuccia told Michigan Farm News.
“We’re in a great power struggle with the Chinese Communist Party. It’s important that we make sure that the components we subsidize through the REAP program are not Chinese components. … We are also looking to preserve prime American farmland and incentivize ensuring that land use remains aligned with core production priorities.”
According to USDA, the final rule is streamlined to reduce risk to the program, simplify administration and prioritize results.
“The result of these changes, combined with the release of a planned online application portal, will significantly decrease burden for applicants by shortening application length and review times across the program,” USDA wrote.
Restuccia said REAP supports infrastructure for businesses and housing, noting “they’re critical to ensure that the communities we serve continue to thrive and grow.”
The public can submit comments via the Federal eRulemaking Portal.
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