Updated October 12, 2026 for USDA’s new REAP rule.
The Rural Energy for America Program (REAP) helps agricultural producers and rural small businesses pay for renewable energy systems and energy efficiency improvements. USDA rewrote the program’s rules in October 2026. This guide explains how the USDA REAP grant works for solar now: how much it pays, who qualifies, how applications are scored and how to apply.
USDA is not accepting REAP grant applications right now. The new rule takes effect October 16, 2026, and USDA will announce application windows in a separate funding notice. For a short summary of what changed, read USDA REAP Grant Rules Have Changed: Build First, Apply Later.
What is a USDA REAP grant?
REAP began in the 2002 Farm Bill and is run by USDA Rural Development. It offers two kinds of help: grants, and guaranteed loans made through commercial lenders. Solar has been the most common use of the program.
From 2023 through 2025, funding from the Inflation Reduction Act let grants cover up to 50% of project cost, with applications filed before construction. USDA withdrew that funding notice in April 2026. The October 2026 rule returns grants to 25% and moves the application to after the system is built and running.
Under the earlier version of the program, PPM Solar customers secured $6 million in REAP grant funding across 21 projects. The rules below are the ones that apply to new applications.
How much does REAP pay for solar?
- Share of cost: up to 25% of project cost. You cover at least 75%.
- Solar and other renewable energy systems: $1,500 to $500,000.
- Energy efficiency improvements: $1,500 to $250,000.
- Grant plus REAP guaranteed loan: no more than 75% of project cost combined.
| Example solar project | Amount |
| Project cost | $400,000 |
| Largest possible grant (25%) | $100,000 |
| Your share, paid before you apply | $300,000 |
The timing matters as much as the amount. You pay for the system first, and the grant is awarded after it has run for a year. REAP is also competitive, so an award is never guaranteed. Plan the project so it pays back on energy savings alone.
REAP can sit alongside the federal tax credit for commercial solar, which is available for systems placed in service by December 31, 2027. Ask your CPA how a grant affects your tax position.
REAP grant eligibility
Eligibility has two halves, the applicant and the project, and both have to pass.
Who can apply
- Agricultural producers: for-profit operations owned by an individual or family (or a Tribe), where the majority owner earns at least half of their income from the operation.
- Rural small businesses: for-profit businesses that meet Small Business Administration size standards and are listed as a small business in SAM.gov.
- The highest-level owner: a subsidiary owned by another company cannot apply.
- An existing business: operating for at least 12 months before the project began, with the site owned or leased for at least that long.
- Financially sound: current assets at least equal to current liabilities, and positive cash flow in the most recent fiscal year.
- One application per federal fiscal year, counted across companies with the same owners.
The project has to be in a rural area, which USDA defines as outside any city or town of more than 50,000 people and the urbanized area next to it. Check an address on the USDA eligibility map.
Which solar projects qualify
- Rooftop solar on a barn, shop, packing house or business building, serving that business’s own load.
- Ground-mount solar that is not on certified cropland, where the site’s past energy use supports the system size.
- One location per application, with a dedicated meter for the business.
- Equipment with documented origin. No component may be made in a country on the federal foreign adversary list, which includes China. Systems installed before October 1, 2026 are exempt from this rule.
- Batteries installed with the array. The battery can be no larger than the array, and annual production is capped at 120% of the prior year’s use.
- A payback no longer than the equipment’s useful life.
What does not qualify
- Ground-mount solar on certified cropland.
- EV chargers and charging stations.
- Stand-alone battery storage, or batteries added to an existing solar system.
- Residential systems, including a business that shares a meter with a home.
- One application covering several locations.
How USDA scores REAP applications
REAP is competitive. Every application is scored on a 100-point scale, and the score decides who gets funded.
| What USDA scores | Points | What it means for solar |
| Energy produced per grant dollar requested | 25 | Calculated from the system’s actual annual production |
| Share of your energy use the system replaces | 20 | Full points when the system replaces 74.5% to 109.4% of your use; zero at 109.5% or more |
| Prior REAP awards | 15 | 15 if you have never received an award; 5 if none in the last two fiscal years |
| Simple payback | 15 | 15 under 10 years; 10 at 10 to 14 years; 5 at 15 to 25 years |
| Business impact | 10 | 5 for three or more employees besides the owners; 5 for critical community services such as grocery, veterinary or medical |
| Environmental benefits | 5 | 3 for a system that produces no greenhouse gases |
| USDA priority points | 10 | Priorities USDA will post on the program website |
An application needs at least 40 points. USDA funds the highest-scoring application in each state first (the top two when more than $100 million is available), then works down a single national ranking until the money runs out. Requests of $20,000 or less compete for a reserved pool first.
How to apply for a REAP grant
Under the 2026 rule, the application comes at the end of the project, not the beginning.
- Build the system and keep the paperwork. Save itemized, dated invoices and proof of payment. Costs count only inside the project period, which can run up to 24 months and ends within 30 days of installation.
- Run it for 12 months. Collect a full year of production data from your monitoring system, and pull 12 straight months of utility bills from before installation.
- Register at SAM.gov. You need an active registration and a Unique Entity ID. Small businesses also need their SBA profile in place.
- Watch for the application window. USDA sets the dates in a funding notice. Your project must have been finished 12 to 24 months before you apply, or 12 to 36 months for the first window. Your USDA Rural Development Energy Coordinator can confirm the details.
- Submit and compete. USDA plans an online application portal. If your application is selected, USDA sends a letter of conditions, and you have 60 days to meet them before the award is approved.
Documents to have ready
- 12 consecutive months of utility bills from before installation.
- 12 months of production data from the finished system.
- Itemized, dated invoices, permits and your interconnection agreement.
- Country of origin for panels, inverters, racking and monitoring.
- Business financial statements: income statement, balance sheet and cash flow. Projects of $200,000 or more also need two years of pro forma statements.
- A record of how you chose your contractor, such as competing bids.
- Your installer’s state license and experience with at least three similar systems.
- A completion certificate from a professional engineer for projects of $200,000 or more.
- A certificate of good standing for the business.
How PPM Solar helps
PPM Solar is a licensed solar and electrical contractor that has designed and built systems since February 2009. Under the new REAP, the most useful things an installer can do are build a system that fits your load and hand you a complete file: itemized invoices, permits, as-built drawings, interconnection records, equipment origin documents and production data.
The rule also tightens conflict-of-interest standards between applicants and the companies that build their systems. The application should come from you or an independent grant professional, and we will make sure you have what it asks for.
Want to know where your project stands? Schedule a commercial consultation or call (352) 309-7727 and ask for a REAP eligibility review.
Frequently Asked Questions
What is the USDA REAP grant?
REAP is the Rural Energy for America Program, run by USDA Rural Development. It gives grants and loan guarantees to agricultural producers and rural small businesses for renewable energy systems, such as solar, and for energy efficiency improvements.
How do I know if my business is in a rural area?
USDA treats an area as rural when it is outside any city or town of more than 50,000 people and outside the urbanized area next to one. Enter the project address in USDA’s eligibility map to check. Under the 2026 rule the project itself has to be in a rural area, including for agricultural producers.
Can I use a REAP guaranteed loan and a REAP grant on the same project?
Yes. They are applied for separately, and together they cannot exceed 75% of project cost. USDA points applicants to the guaranteed loan to help with upfront cost, because the grant now comes after the system is built.
Does REAP cover energy efficiency projects?
Yes. Energy efficiency improvements to existing buildings and equipment can receive up to $250,000. They need an energy assessment for projects of $80,000 or less, or an energy audit above that. Improvements to new construction no longer qualify.
Can homeowners or nonprofits apply for REAP?
No. Applicants must be for-profit agricultural producers or rural small businesses. Residential systems are not eligible, and a business system can no longer share a meter with a home.
Sources
- Federal Register, final rule 2026-20178 (91 FR 62600)
- USDA press release, October 2, 2026
- USDA Rural Development, REAP program page
This guide is a plain-English summary as of October 12, 2026, not legal, tax or grant advice. USDA’s rule and its funding notice control.
