How much can a REAP grant pay in 2026?
Last updated . Reflects USDA's October 1, 2026 final rule.
A REAP grant request must be at least $1,500. The most you can request is $500,000 for a renewable energy system (RES) or $250,000 for an energy efficiency improvement (EEI). (7 CFR §4280.122(a)(2)) The grant can also cover no more than 25% of the project cost, because you must pay at least 75% yourself. (7 CFR §4280.122(a)(3))
Minimum and maximum grant request
The rule sets the same minimum for both project types but a different maximum. (7 CFR §4280.122(a)(2))
| Project type | Minimum request | Maximum request |
|---|---|---|
| Renewable energy system (RES) | $1,500 | $500,000 (7 CFR §4280.122(a)(2)(i)-(ii)) |
| Energy efficiency improvement (EEI) | $1,500 | $250,000 (7 CFR §4280.122(a)(2)(i)-(ii)) |
An application that asks for less than the minimum or more than the maximum is ineligible. (7 CFR §4280.122(b)(1)) If USDA removes unallowable expenses and the amount that can be awarded drops below $1,500, the project is not eligible. (7 CFR §4280.122(a)(2)(i))
The 25% cap: you pay at least 75%
Cost sharing is required for at least 75% of the project cost. (7 CFR §4280.122(a)(3)) That leaves the grant at no more than 25%. The rule's own example: if the project cost is $1,000,000, your cost sharing must be at least $750,000. (7 CFR §4280.122(a)(3)) Your cost sharing funds must be available during the project period and must go to allowable expenses. (7 CFR §4280.122(a)(3))
Illustration only. A finished project cost $200,000. Twenty-five percent of $200,000 is $50,000, so the largest grant it could request is $50,000. You would cover the other $150,000 or more. The grant is also limited by the maximum request in the table above, so you take whichever number is lower. This example assumes every cost in the budget is allowable.
You can use the score estimator to see how the size of your request affects your points, since one scoring criterion divides energy saved or produced by the grant dollars requested. (7 CFR §4280.140(d)(2))
Grant plus guaranteed loan: 75% combined limit
A project is ineligible if total REAP funding, meaning the REAP grant and any REAP guaranteed loan together, would be more than 75% of the project cost. (7 CFR §4280.122(b)(20)) You may apply for a REAP guaranteed loan and a REAP grant separately for the same project. REAP guaranteed loans follow 7 CFR part 5001 (rule discussion, Federal Register 2026-20178). If you plan to use both, read our project financing page.
Reserved funds for requests of $20,000 or less
Applications that request $20,000 or less can compete for reserved funds. (7 CFR §4280.123) These applications are funded in rank order until the reserve runs out or the 40-point minimum score is reached. No application is guaranteed funding. (7 CFR §4280.150(a)) Applications that do not win reserved funds also go into the national competition with all other applications (rule discussion, Federal Register 2026-20178).
The rule does not state how many dollars are set aside in the reserve. Ask your State Energy Coordinator if that matters to your plans.
One award per owner per year
USDA will approve no more than one award each federal fiscal year from each highest-level owner and the entities owned by its individual owners. (7 CFR §4280.120(a)(8)) Entities that share common management or ownership, at any percent, count as one entity for the funding limit. (7 CFR §4280.153) See our guide to the highest-level owner rule.
What the grant can pay for
All project costs, from any source, must be for allowable purposes. (7 CFR §4280.122(a)(5)) Allowable costs must be directly related to the approved project, incurred as part of the installation, and integral to running the system. (7 CFR §4280.125(a)) Allowable costs include:
- Buying and installing new or refurbished equipment, when the budget includes both the equipment and its installation. (7 CFR §4280.125(a)(1))
- Construction related to installing the system, retrofitting, replacement, and improvements. (7 CFR §4280.125(a)(2))
- An Energy Assessment, Energy Audit, or Resource Assessment, unless any of its cost was charged to another federal award. (7 CFR §4280.125(a)(3)-(4))
- Construction permit and license fees, and fees required by an interconnection agreement. (7 CFR §4280.125(a)(5))
- Architectural and engineering fees. (7 CFR §4280.125(a)(6)-(7))
- A dedicated meter for an RES project. (7 CFR §4280.125(a)(8))
- For RES projects that have them, up to 25% of project costs for distribution components and ancillary infrastructure. (7 CFR §4280.125(a)(9))
- Up to 10% of the award amount for broadband infrastructure related to the project, subject to 7 CFR part 1980, subpart M. (7 CFR §4280.125(a)(10))
What the grant cannot pay for
The rule lists 21 kinds of unallowable costs. (7 CFR §4280.125(b)) Grouped in plain terms:
| Category | Examples from the rule |
|---|---|
| Land, vehicles, and farm equipment | Real property. Tractors, balers, mowers, skid steers, chain saws, and other agricultural, lawn, and garden equipment and power tools. Vehicles of any kind. (7 CFR §4280.125(b)(1)-(2), (b)(5)) |
| Equipment you do not own outright | Used equipment. Equipment not wholly owned by you, such as utility-owned substation upgrades, lines, and poles. Lease payments, including lease-to-own. (7 CFR §4280.125(b)(3)-(4), (b)(6)) |
| Ongoing costs | Monthly meter fees, insurance, operations and maintenance, and extended warranties. (7 CFR §4280.125(b)(8)-(11)) |
| Studies and paperwork | Feasibility studies. Costs to prepare the grant application. (7 CFR §4280.125(b)(7), (b)(17)) |
| Owner labor and conflicts | Labor done by anyone who owns the applicant. Goods or services from someone with a conflict of interest with you. (7 CFR §4280.125(b)(13)-(14)) |
| Items not part of the energy project | Perimeter fencing. Expenses not directly related to the project, such as a building foundation, storage-only grain bins, or the roof under solar panels. (7 CFR §4280.125(b)(12), (b)(18)) |
| Other federal money and rules | Expenses paid by another federal award. Repaying federal loans or debt. Political or lobbying activity. Costs unallowable under the federal cost principles in 2 CFR part 200, subpart E. (7 CFR §4280.125(b)(15)-(16), (b)(19)-(20)) |
| Timing | Any cost incurred outside the project period. (7 CFR §4280.125(b)(21)) |
The 25% unallowable cost test
If more than 25% of your project budget is unallowable costs, the whole project is ineligible. (7 CFR §4280.122(b)(21)) If 25% or less is unallowable, USDA removes those costs before it looks at the other eligibility factors. (7 CFR §4280.122(b)(21)) Before you apply, sort your invoices into allowable and unallowable piles so you know where you stand.
The rule does not say in so many words whether the 25% grant cap is figured on the budget before or after unallowable costs are removed. Confirm with your State Energy Coordinator before you set your request amount.
When and how the grant is paid
The rule does not spell out when or how grant money is paid out. Here is what it does say about the steps after selection:
- USDA notifies selected applicants with a letter of conditions (LOC). The LOC lists the conditions for approval and includes a copy of the award terms. (7 CFR §4280.151(a))
- You have 60 calendar days to meet those conditions, unless the LOC says otherwise. If you miss the deadline, USDA stops processing the application. (7 CFR §4280.151(b))
- Once you meet the conditions, USDA reviews the award. Approval happens when Form RD 4280-2, the Financial Assistance Agreement, is signed. That form holds all the terms of the award. (7 CFR §4280.153)
- Costs must be allowable and incurred during the approved project period. (7 CFR §4280.153)
- A final financial report (SF-425) and a final performance report are due 120 calendar days after award approval. (7 CFR §4280.160(a)-(b))
You must keep owning the system, and keep owning or controlling the site, until the final payment is disbursed. (7 CFR §4280.120(a)(6)) If you receive an award, you must provide copies of all invoices and payments. (7 CFR §4280.131(b)(18)) The standard award terms and conditions are posted on the program website. (7 CFR §4280.151(c)) For payment timing and method, read the Financial Assistance Agreement and ask your State Energy Coordinator.
Before you set your request
- Check whether your business and project qualify.
- Review who qualifies under the new rule.
- Estimate your score with your planned request.
- See whether REAP is open right now.
Cleaner Greener Future can help you sort costs and size your request. Contact us.
Related guides
USDAREAPGrant.com is an independent website operated by Cleaner Greener Future LLC. It is not USDA. This page summarizes the October 1, 2026 final rule, which USDA may revise after the comment period. For official information, see USDA Rural Development or your State Energy Coordinator.
Know your number before you apply
Check whether your finished project qualifies, then see what the 25% cap means for your request.