When grain prices cratered in 2023, Danny Wesner figured the 40-acre solar lease on his central Indiana farm was the smartest financial decision he had made in a decade. The contract promised $1,200 per acre annually for 30 years, more than soybeans had netted him in three of the previous five seasons. He signed, the developer filed permits, and a Rural Energy for America Program grant application went to the USDA to cover a chunk of the installation costs.
Then the grant money stopped. On March 31, 2025, the USDA’s Rural Business-Cooperative Service posted a stakeholder notice announcing that REAP would not make further grant awards until updated regulations take effect. No target date was given. Wesner’s project, along with an unknown number of similar applications, entered a holding pattern with no visible exit.
His situation is not unique. Across rural America, farmers who leased acreage for solar arrays are watching projects stall as the Trump administration redirects federal energy policy toward fossil fuels. A joint investigation by the Associated Press and Grist, drawing on Energy Information Administration developer filings, identified at least 126 proposed solar projects on agricultural land awaiting regulatory approval since 2024. That count captures only installations large enough to file with the EIA. Smaller farm-scale systems that depend on REAP grants likely push the real number considerably higher.
How the federal funding pipeline froze
The grant suspension traces to Executive Order 14154, “Unleashing American Energy,” which President Trump signed on January 20, 2025, to refocus federal energy programs on domestic oil, gas, and coal production. A USDA press release on March 25, 2025, confirmed that recipients of REAP, New ERA, and PACE funding were told to review and potentially revise project plans to align with the executive order. Applicants received a 30-day window to submit revised proposals.
The practical consequence: solar projects already deep in the approval pipeline had to demonstrate compatibility with an energy agenda built around fossil fuels or risk losing their funding commitments entirely. REAP guaranteed loans, a separate track, continue to operate, but loans shift the financial risk squarely onto borrowers and lenders. For small and mid-size farm operations, the grants were often the difference between a project penciling out and falling apart.
The REAP freeze does not exist in isolation. The Inflation Reduction Act of 2022 expanded clean energy tax credits under Section 48 that many farm solar developers were stacking on top of REAP grants to make projects financially viable. While those tax credits remain law, the loss of the grant layer narrows the margin enough to kill deals that were structured around both incentives. Developers who built their financial models on the combination now face a gap that loan financing alone may not fill.
Tariffs compounded the cost squeeze
Federal funding is only half the problem. Section 201 safeguard tariffs on imported solar cells and modules, first approved in early 2018 during Trump’s first term, raised equipment prices for developers and farmers alike. The Biden administration extended those tariffs in 2022, and the current administration increased them further in 2025. Each round tightened the cost math on rural installations that were already operating on thin margins.
The result is a two-front financial problem. Hardware costs have climbed because of trade policy. Federal grants that offset those costs have been frozen by energy policy. Developers report that some projects now require per-acre lease payments to drop by 20 to 30 percent to remain viable, a renegotiation that farmers who signed contracts at higher rates have little incentive to accept.
State-level friction adds a third layer
Federal policy shifts are landing on top of state and county battles over solar siting on farmland. In Illinois, Indiana, and Ohio, local governments have imposed moratoriums, setback requirements, and acreage caps on solar installations over the past two years, often driven by neighbors concerned about property values and the loss of productive cropland. Farmers who cleared federal and state permitting hurdles only to hit the REAP freeze now face the possibility that local rules will tighten further before their projects can restart.
The layered uncertainty makes long-range planning nearly impossible. Equipment contracts, construction schedules, and interconnection agreements with utilities all carry time-sensitive terms that erode as delays stretch on. A developer who secured a grid connection slot in 2024 may lose it if construction has not begun by late 2026, forcing the project back to the end of a utility queue that can stretch years.
What the data does not yet show
Several critical questions remain unanswered as of May 2026. No public record shows how many REAP applicants submitted revised project plans during the 30-day review window, how many were rejected, or how many simply walked away. The USDA described a process but has not disclosed outcomes.
Direct financial losses to individual farmers are equally hard to quantify. Lease terms, projected revenue, and sunk costs vary widely by state and project size. No institutional economic impact study from the USDA or another federal agency has been published. Statements from affected landowners and developers have appeared in regional news coverage, but systematic data collection on cancellations and their financial consequences does not yet exist in the public record.
The timeline for new REAP regulations is also open-ended. The USDA said grants would resume once updated rules take effect but set no deadline. For farmers holding frozen applications, that ambiguity is itself a cost. Every month of delay is a month without the lease income they budgeted for, and a month closer to the expiration of contracts that developers may not renew.
Where this leaves farmers holding solar leases
The documented record supports a few cautious conclusions. Federal policy has clearly shifted in ways that make grant-dependent solar projects harder to finance, at least in the near term. Existing funding commitments are subject to reinterpretation under an executive order that prioritizes fossil fuel production. Some projects may eventually move forward under revised rules or alternative financing structures, but others are likely to be scaled back or canceled outright.
For landowners like Wesner, the calculus has changed. The lease is still signed. The developer has not formally pulled out. But the grant that was supposed to underwrite the installation is frozen, the equipment is more expensive than it was when the deal was struck, and the county next door just passed a solar setback ordinance that has developers rethinking the entire region. He is still farming the 40 acres, which is the one thing that has not changed. Whether the panels ever arrive depends on decisions being made in Washington, in trade offices, and in county commission chambers, none of which he controls.
Until the USDA publishes new REAP rules and the backlog of applications clears, the full impact of these policy shifts on rural solar will remain an open question. What is already visible is a widening gap between the promises farmers were made and the federal support those promises depended on.
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*This article was researched with the help of AI, with human editors creating the final content.
