Iowa Farmers Union, solar group sues USDA
Changes to renewable energy funding program at core of lawsuit
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Environmental groups have filed a lawsuit against the U.S. Department of Agriculture on behalf of several farmers, farm groups and solar agencies for changes to a renewable energy program that impacts solar projects.
The lawsuit alleges that USDA changes made to the Rural Energy for America Program, or REAP, during the Trump administration have made "almost all solar projects ineligible" for funding under the program.
Further, the lawsuit alleges, the rule changes were retroactively applied to solar projects that had already been selected for funding and had invested in and begun building the solar projects before they were told their project was no longer eligible for the funding.
Iowa Farmers Union President Aaron Lehman said in a webinar Thursday that Iowa has been a "leader" in adopting the program, which is administered through USDA Rural Development and has been part of the farm bill since 2008.
"Unfortunately, we've seen some very unfortunate twists and turns with the program that our members have been impacted by," Lehman said. "This breaking of this commitment is really damaging."
According to the lawsuit, which was filed by Earthjustice and Environmental Law & Policy Center, solar projects accounted for more than two-thirds of projects that were awarded REAP funding between 2011 and early 2025. Iowa rural communities have used the funding to install rooftop solar on small businesses and to put solar panels and wind turbines on hog operations. The funding has also gone to ethanol facilities and grain dryers to make energy efficient upgrades.
In August 2025, the Trump administration announced plans to restrict the use of federal subsidies for solar energy projects in favor of protecting farmland. The announcement specifically noted the REAP funding could not be used for solar projects of a certain size. It also stipulated that USDA funding could not be used to fund solar projects that had solar panels built by "foreign adversaries" including China, which dominates the solar manufacturing industry.
Chad Hughes, of Environmental Law & Policy Center, spoke with Iowa Farmers Union members Thursday during a lunch and learn webinar and said the changes essentially put the program on pause. Then, a USDA announcement in March 2026 showed the agency was adding new regulations to the program and applications could be resubmitted once the new regulations were in place.
"People expected to get paid, and they followed the rules and they built these systems, and then suddenly they're being told by USDA, 'Oh, sorry, just kidding, you're gonna be denied because you know you didn't follow rules that did not exist when you applied,'" Hughes said.
REAP was created for renewable energy
A key point of the lawsuit hinges on the groups' assertion that the REAP program was initiated by Congress, with the intent to encourage renewable energy development in rural areas.
Text from the 2008 farm bill says REAP will "promote energy efficiency and renewable energy development for agricultural producers and rural small businesses."
Hughes said that while the current USDA leadership "doesn't like renewable energy" it's not within their power to ignore the direction from Congress.
"USDA does not have the ability to advance policies based on a political disagreement with Congress," Hughes said.
USDA communications about the changes to the program have emphasized the need to protect farmland from being taken over by solar projects and to end the "massive cost of providing taxpayer handouts for unreliable energy sources" as part of the Trump administration's energy dominance priorities.
"At a time when energy prices are soaring, you're taking away a program that's meant to add capacity to the grid," Hughes said. "So, it just really doesn't make sense."
'Mid-flight' rule changes
The environmental groups are representing Iowa Farmers Union, Iowa Solar Energy Trade Association, RENEW Wisconsin, Solar United Neighbors, Illinois-based farms, the New York Solar Energy Industries Association, Wolf River Electric and two New Mexico-based renewable energy consultancies. The groups are also suing over the retroactive application of the regulations.
The lawsuit alleges that farms owned by members of the Book family, the Illinois-based operations in the lawsuit, had been selected to receive more than $300,000, collectively, in REAP funding for solar projects. The families began construction on the solar arrays, then in March the rules were retroactively applied and USDA said it would be "refusing to disburse the REAP awards," according to the suit.
"We just have these awful situations where farmers have lived up to their end of the bargain, have committed to this public-private partnership too, and are left holding the bag," Lehman said.
Hughes said the rules can't be changed "mid-flight" unless the department has express authority to do so under the statute or "a really, really good reason" to do so.
"USDA has neither," Hughes said.
Hughes said the USDA, through the REAP program, has been supportive of solar projects for more than 20 years, and argued the department has not given "sensible reasons" for its "massive" change in opinion toward funding solar projects.
USDA announces final rules for REAP
As of Thursday, USDA has not filed a response to the lawsuit.
Final rules for REAP were filed in the Federal Register Thursday, however, stating that under the rule, REAP projects "must already be fully built and operational" before applicants apply for funding.
The rule summary said the new rules create a "streamlined but significantly different process intended to reduce risk to the program, simplify administration, and prioritize projects delivering verifiable results."
Hughes, speaking to Iowa Farmers Union members, said the rule is "pushing a lot more risk" onto farmers and rural small business owners who apply for the program.
"It's basically making REAP only available to those who can afford to carry those costs for a year or two without knowing whether or not they're going to be reimbursed," Hughes said.
According to USDA data, the department has made more than 1,200 REAP project investments, totaling over $114 million in Iowa since 2016. For fiscal years 2025 and 2026, REAP investments totaled more than $26 million for over 200 Iowa projects.
Lehman said farmers union members who have committed to adding renewable energy to their operations have said they feel "betrayed" by the changes to REAP.
"This is not a hopeless situation," Lehman said. "We can take action to fight back against these injustices, and we don't have to sit back and take it when these betrayals happen to our farmers. So we're bringing attention to this because this is something that we can do."