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The Rural Energy for America Program is being revised with stricter and longer requirements for renewable energy projects seeking grants, according to Solar Power World. The program has historically supported rural farmers and small business owners pursuing renewable energy projects, with grants covering a quarter of a qualifying project’s cost before the Inflation Reduction Act raised that share to half.
The USDA published an update to the program in the Federal Register on the morning of October 1, 2026, with the changes set to take effect on October 16. The revision bars ground-mounted solar projects built on farmland from grant eligibility, while rooftop solar is described as eligible.
Under the new structure, renewable energy and energy efficiency projects no longer apply for grants in advance. A solar project must already be constructed, and applicants must submit at least a year of pre-installation data along with a year of production data.
The document describes the shift as moving the program to a post-completion, performance-validated model, with awards based on documented output, energy savings, costs and system performance. Multi-site projects are excluded, as are systems using components from prohibited foreign entities.
Grants for renewable energy projects can range from $1,500 to $500,000, though a single grant may cover only a quarter of a project’s total cost. The funding can apply to both retrofits and new projects.
The change continues the current administration’s policy actions centered on American farmers, which have signaled an intent to discourage building renewable energy sources on farmland. Last year, the USDA cut funding for solar and wind project construction on rural land, including through its Business and Industry Guaranteed Loan program, and set a 50-kW limit on ground-mounted solar projects under the program.
The grants have supported new solar output in rural regions of the United States, with some solar contractors relying on them to build new solar and to shorten payback periods for farmers and businesses operating on narrow margins.
The forthcoming update is accompanied by a public comment period, though it acknowledges that the changes can be made without public input.
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