The USDA REAP grant program is a powerful resource designed to help farmers and rural businesses boost America’s energy independence by covering a significant portion of the installation cost for a solar energy system.
When you combine this substantial grant with tax incentives and long-term electricity savings, investing in solar becomes an easy choice for many farmers and other businesses. However, securing this competitive grant isn’t guaranteed and requires a fair amount of work to apply.
Paradise Energy has helped hundreds of farmers and businesses secure the REAP grant, with a near-100% success rate in many of the states we serve. Drawing from this experience, we’ve put together this blog to break down what the USDA REAP grant is, who qualifies, and the essential steps in the application process to help you maximize your chances of securing these grant funds for your solar investment.
The United States Department of Agriculture (USDA) Rural Energy for America Program (REAP) is a highly sought-after opportunity for agricultural producers and rural commercial businesses to receive grants for energy-efficiency improvements and renewable energy projects, like solar.
In 2023, the grant funds received a massive injection of money from the Inflation Reduction Act, pushing the grant coverage up to 50% of the total installation cost of your solar panel system, with a maximum funding limit of $1 million. The previous 25% funding option available through the farm bill is still active.
Today, the USDA REAP Grant is more competitive and complex than ever. While it still offers significant funding opportunities for farmers and rural small businesses, the scoring system has shifted in ways that directly impact solar projects.
For example, ground-mounted solar systems now face scoring penalties, making rooftop projects more favorable in the application process. Applicants are evaluated based on several criteria, including environmental benefits, energy generated or saved, financial commitment, payback period, and participation status. First-time participants receive shorter paybacks and earn more points.
The takeaway: eligibility alone doesn’t guarantee funding. Farmers filing Schedule F and rural businesses filing 1065 or 1120 may qualify. Still, strong documentation, clear demonstration of energy savings, and choosing the right project type are essential to score high enough for funding. The REAP Grant remains a valuable tool to cut solar costs, but success depends on building a competitive application that aligns with the USDA’s latest scoring priorities.
The eligibility criteria for the USDA REAP Grant have undergone significant changes since its previous iteration before 2023. Most farms and rural small businesses in an eligible area should qualify for grant funding. However, meeting the eligibility requirements does not guarantee securing this highly competitive grant.
Farmers (Schedule F) Qualify for the USDA Grant
If you use Schedule F, you will file as an agricultural producer. To qualify, the majority of your income (51%) must come from the farm. Additionally, the majority of the electricity you use (51%) must be consumed by farm operations — not by personal residences attached to the property. Any electricity you use for your residence will not count toward your 51%. You must also be free of any owed back taxes to the IRS.
Businesses (Form 1065 or 1120) Qualify for the USDA Grant
If you file a 1065 or 1120, you will be applying as a rural small business. The rules for qualifying are similar to those for farms: the majority of electricity consumed (51%) on the property must be for business purposes only, and the applicant can’t owe any back taxes. Most businesses that operate out of a residence do not qualify.
Additionally, the business must be located in a qualifying area. The USDA defines this as an area with a population of 50,000 residents or less. You can use the USDA's Eligibility Map to determine if your business is in a qualifying area. If your property is close to a qualifying area but not quite within the shaded portion, check with a USDA Grant professional to determine whether it qualifies.
Submissions for the USDA REAP grant are currently accepted in three rounds per year. Those rounds are March 31, September 30, and December 31.
Anyone seeking a REAP Grant must submit their application in a specified round. A portion of the overall program’s funding bucket is split between each round and allocated to qualifying businesses and farms through the REAP Grant.
If there are more qualifying systems than the round’s budget can serve, the highest-scoring applications will receive the grants first until the funding runs out. The likelihood of every qualifying applicant receiving a grant reward depends on the number of people who apply.
If you aren’t awarded a grant in the round you applied, your application will automatically roll over to subsequent rounds in the same calendar year.
The Safer Option: Take the 25% USDA Grant
We are seeing a lot of competition for the 50% USDA REAP Grant. If your project is unlikely to score well, you can increase your odds by applying for a 25% grant.
The application process is often coordinated by your solar installer or a third-party grant writer, but you will need to participate.
Required Documentation
Important Details
Any costs incurred before the USDA provides notice that your REAP Application is "Complete" are not eligible for reimbursement. However, once the application is complete, applicants do not have to wait for formal approval to begin project work.
Digital documents or forms must be signed individually. Batch signing of documents will result in rejection.
Your USDA REAP grant application will be judged on a points-based system and ranked against other applications. The criteria below reflect the current guidelines in effect as of September 9, 2025. These will likely change for fiscal year 2026.
Note:
Understanding the USDA REAP Grant process can be complex, with numerous deadlines, eligibility requirements, and funding guidelines to consider. To make it easier, we’ve compiled answers to some of the most frequently asked questions about the program. Whether you're wondering about application timelines, tax implications, or how to improve your chances, this guide has you covered.
The USDA REAP Grant remains one of the best ways for farmers and rural businesses to reduce the upfront cost of going solar, but with recent changes, success requires planning, preparation, and the right partner to guide you through the process. At Paradise Energy Solutions, we’ve helped hundreds of organizations secure funding and maximize their investment in solar.
Request your free custom quote to take the first step towards taking control of your unpredictable electric bill. Our team will walk you through your options and help you determine the best strategy to make solar work for you.