A coalition of farmers, solar developers and trade groups sued the Agriculture Department in federal court in Washington, D.C., alleging the agency illegally restricted solar projects' access to the Rural Energy for America Program, which directed 68% of its grant and loan guarantee awards to solar between 2011 and the first quarter of 2025.

The complaint argues that eligibility restrictions USDA added to REAP exceed the agency's authority and conflict with the program's congressionally mandated purpose of promoting renewable energy. It also challenges USDA's decision to require pending grant applicants to reapply under rules that have not yet been issued.

REAP, created by the 2008 farm bill and administered by USDA's Rural Development division, provides grants and guaranteed loans for on-farm renewable energy sources including solar, biomass, wind and geothermal, plus energy-efficient equipment such as grain dryers.

What does the lawsuit target?

In an August letter, Rural Business-Cooperative Service Administrator JR Claeys said REAP projects with ground-mount solar photovoltaic systems larger than 50 kilowatts that "cannot document historical energy usage," or that would sit on certified cropland, would be ineligible for guaranteed loans and "disincentivized" in grant scoring. The same prohibition applies to systems with components from "foreign adversaries."

USDA paused new REAP grant awards earlier this year to implement new regulations under a July executive order calling for reduced federal subsidies for wind, solar and other "green" energy sources. The pause covers all fiscal 2025-2027 applications without a "fully executed" financial assistance agreement.

Who are the plaintiffs?

Plaintiffs include:

• 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
• SVF LLC
• David and James Book, co-trustees of the Donald M. Book GST Exempt Residuary Trust

Chad Hughes, a senior associate attorney at the Environmental Law and Policy Center, told Agri-Pulse that USDA's new criteria will make REAP funding difficult to use for solar moving forward. He characterized the agency's explanation as "we don't like wind, we don't like solar, and we don't want to see wind and solar on farmland."

"We're hoping to go into court and to fight these new eligibility criteria so that farmers and rural small businesses can continue to make a choice to invest in solar," Hughes said, "because we believe that under the law as written, that's the whole point and they should be able to make that choice."

A USDA spokesperson defended the policy, telling Agri-Pulse that during the last administration the U.S. "saw solar farms consume fertile farmland that should be feeding America." The statement added: "Those days are over. USDA will not actively participate in repurposing farmland historically used to sustain this country's abundant food supply."

What projects are affected?

The complaint cites USDA data showing wind and solar used less than 0.05% of U.S. farmland in 2020, plus a Department of Energy estimate that solar will require 0.3% of farmland by 2035 to meet national renewable energy needs.

Two Book-family operations anchor the case. The Donald M. Book GST Exempt Residuary Trust, which holds more than 1,300 acres of Illinois corn and soybean farmland, was selected for $185,328 in REAP funding in 2023 to install a 178-kilowatt solar array offsetting grain-dryer energy costs.

SVF LLC, owner of Brechon Farm in Illinois, was selected in 2024 for $261,144 to install a 251-kilowatt solar array for the same purpose. Both began installing with USDA's encouragement before the agency, in March 2026, told them to reapply under new rules.

The lawsuit alleges the reversal "upended the Book Family Farms' reasonable expectation of reimbursement for costs incurred in reliance on the approved REAP funding, and that has caused severe economic harm." REAP generally reimburses applicants after construction is complete.

At least two Iowa Farmers Union members also lost reimbursement eligibility for completed REAP projects. Another IFU member who works as a REAP consultant reported losing $470,000 in expected revenue from 55 client applications and laying off all staff.

Whether the court grants relief will determine if USDA can tie REAP reimbursements to the yet-to-be-published solar restrictions — or must continue paying out under the eligibility framework that existed when applicants broke ground.